8-planned-giving

PLANNED GIVING

A planned gift is typically a charitable donation, which can be arranged, as part of your overall financial and estate planning, during your lifetime but is not available to the David Foster Foundation until sometime in the future.

A planned gift can help you achieve your personal tax and financial goals, as well as your philanthropic goals, and it can help you make a much larger gift than otherwise possible, creating a truly lasting legacy for generations to come.

The planned giving ideas presented are intended to begin a discussion of what is possible so that a customized strategy can be developed that will fit you, the donor, and your objectives.

BEQUESTS

Designate the David Foster Foundation as a beneficiary in your will.  Gifts can be an absolute dollar amount, a specific asset or a percentage or residue of your estate.

RETIREMENT PLAN ASSETS

Designate the David Foster Foundation as a beneficiary of a qualified retirement plan (RRSP/RRIF/TFSA).  Your gift will be treated as a donation in the year of death.  In addition you can donate your RRIF income or set up a bequest in your will to give an amount equal to the balance in your RRIF.  The David Foster Foundation would issue a tax receipt for the value of the gift.

SECURITIES

Consider a gift of securities in lieu of a cash donation.  Transfer the full or partial title to your non-registered stock portfolio to the David Foster Foundation.  Receive a charitable tax receipt for the fair market value of the securities while also avoiding capital gain taxes on any accrued gains on the securities.

CHARITABLE REMAINDER TRUST

Transfer of assets to a trust whereby the trust beneficiaries retain a life interest in the property.  Upon their passing, The David Foster Foundation receives the residual assets remaining in the trust.

CHARITABLE GIFT ANNUITY

Donate a lump sum to the David Foster Foundation who will use 70 to 75% of it to purchase a commercial annuity.  This annuity will pay out regular payments to you for the rest of your life.  The remaining 25 to 30% flows directly to supporting the mission of the David Foster Foundation and is tax receipted.  In addition, any residual amounts in the annuity after your death will pass to the foundation.

LIFE INSURANCE

Donate a new life insurance policy on your own life or on the life of another individual.  The David Foster Foundation will become the owner and beneficiary of the policy and will issue you tax receipts for the annual premiums.  As the beneficiary, the David Foster Foundation will receive the death benefit under the life insurance policy on death, tax-free.

Example of the gift of a new life insurance policy:

  • Female aged 60, healthy, non-smoker, wants the David Foster Foundation to receive $250,000 upon her passing.
  • The annual premium would be approximately $4,400, the foundation will issue a tax receipt for the annual premium paid and the tax savings in respect of the gift would be about $2,200.
  • For $2,200 per year she has given $250,000 to the foundation.

Donate an existing life insurance policy you no longer require, rather than canceling it.  The David Foster Foundation will become the owner and beneficiary of the policy and will issue you a tax receipt equal to the fair market value of the policy as well as tax receipts for the future annual premiums. The fair market value of an existing policy will be based on the age of the policy (the older the policy, the higher the value) and the health of the insured (the poorer the health, the higher the value).

Example of the gift of an existing life insurance policy:

  • Couple aged 65 and 65.
  • Wants the David Foster Foundation to have their $250,000 life insurance policy upon their passing.
  • They purchased the policy years ago and no longer need it for their estate plan; the premium is $2,000 per year.
  • An actuary has valued the policy at $50,000; the foundation will issue a tax receipt for $50,000 immediately and $2,000 per year for the payment of the annual premium.
  • There will be about $25,000 in tax savings on the gift of the policy which could fund the annual premiums due on the policy for about 25 years assuming that the annual premium will save about $1,000 in taxes annually.

Designate the David Foster Foundation as a beneficiary of a new or existing life insurance policy on your own life or on the life of another individual.  You would continue as the owner and pay the annual premiums with no tax deductions.  The David Foster Foundation will eventually receive the death benefit tax-free and will then issue a tax receipt for the full death benefit received.  This strategy is ideal if you will have a large income tax liability in your estate.  The tax savings on the gift of the life insurance benefit will reduce or potentially offset the income tax liability triggered in your estate.

Example of changing the beneficiary on a life insurance policy:

  • Female aged 65.
  • Owns a $100,000 life insurance policy and her family has predeceased her.
  • Wants the David Foster Foundation to receive the $100,000 upon her passing.
  • The premium is $3,000 per year.
  • The tax savings to her estate on her death in respect of the gift would be about $50,000.
  • For $3,000 per year she has given $100,000 to the foundation and saved $50,000 in taxes.

RETURN OF CAPITAL GIFTS

Give a gift of cash or property to the David Foster Foundation today, and return the same amount to your heirs tax-free with interest.

Who is this strategy for?

Donors who have assets and income in excess of their lifestyle needs, and who wish to provide immediate financial support for the foundation without any material long-term financial impact for their intended heirs.

How does it work?

Donate cash or property to the foundation during your lifetime.  A tax receipt will be issued equal to the fair market value of the gift.  The sequence and timing of the gift can be pre-planned to optimize the tax savings.  Utilize the tax savings generated by the gift to reinvest in a personalized permanent life insurance contract designed to return the original gift to the heirs, with interest, tax-free.

Example – $1,000,000 Gifted During Lifetime

  • A sixty-year-old couple wishes to donate $1Million to the David Foster Foundation today
  • Would like the $1Million preserved for their heirs
  • Have sufficient assets & income to provide a secure lifestyle for the remainder of their lifetime

In this example, not only does the David Foster Foundation benefit from the $1Million gift today, but also 100% of the original donation has been returned to the intended heirs, with interest, on a tax-free basis.   If desired, the returned capital could also be re-gifted to the Foundation on death, resulting in over twice the impact on the original gift.  As you can see, making a significant difference in the lives of others doesn’t have to come at the cost of one’s own family objectives.

No matter which method you choose to make a charitable gift to the David Foster Foundation, your contributions are deeply appreciated.  The David Foster Foundation’s excellence is built through visionary people having an extraordinary impact through their planning and generosity.

The charitable giving strategies outlined above are intended to be general in nature and should not be construed as tax or financial advice.  The David Foster Foundation encourages all readers to seek qualified advice from a tax & financial planning professional before engaging in any charitable giving strategy.

For Further information please contact:

Victoria Office: 250-475-1223 or toll-free: 1-877-777-7675

Toronto Office: 416-865-4646