Charitable Remainder Trusts
Prairie crocus (Photo by Karol Dabbs)
Charitable remainder trusts are powerful planning tools for people who are 70 years and older and who have made, or are planning to make, a charitable bequest.
They are life income gifts that enable you to give today and create immediate tax savings, yet retain the income from the donated asset.
After a prescribed period of time or upon your passing, the asset is transferred to one or more charities.
How does it work?
In essence, you transfer a property (such as investments, real estate, works of art, etc.) in trust, and reserve an annuity interest in the property for your benefit and that of your spouse and/or other beneficiaries.
Then, instead of making a bequest in a Will, you make an immediate gift of the remainder interest in the property in trust to the Nature Conservancy of Canada (NCC) and retain an annuity income interest for life.
What is the result?
The result of this planned gift is that you receive income and use of the property during life.
Also, you divide this property into two parts, each of which has a value on the date of the gift:
- a life income interest; and
- a remainder trust.
How is the tax deduction calculated?
The immediate tax deduction available to you depends on the value of the property, your age, beneficiaries and the period of time that the income interest will exist.
The tax-receipted value of your remainder trust may eliminate all income taxes in the year the gift was made, as well as in the following five years.
Our team will be pleased to discuss the many tax, estate and personal planning benefits of these trusts.
If you have any questions, please email us or call us at 1-800-465-0029 ext. 2276
The information provided on these pages is general in nature and not intended to be a substitute for professional legal or financial planning advice. NCC encourages all donors who are planning a significant gift to seek independent legal and/or financial planning advice.