Bequests By Will
A bequest to Ontario Nature in your will can create a lasting legacy. Gifts of a specific cash amount or asset or a percentage of the remaining estate are popular bequest choices. Your estate receives a donation receipt for the value of your gift, providing a tax credit to reduce tax otherwise payable on your final tax return. You can also leave Ontario Nature capital property in your will. This could be an outright gift of a capital property (for example real estate) or a gift of a residual interest. Both types of gift have unique tax advantages. As an example you may decide to transfer your residence to Ontario Nature now, but continue to use it during your lifetime. You would receive a donation receipt for the value in today's dollars of the property to be received by Ontario Nature at the end of your lifetime.
General bequest language:
"I give, devise, and bequeath to Ontario Nature in the city of Toronto, the sum of $________ (or a description of the specific asset), for the benefit of Ontario Nature and its general purposes."
Specific bequest language:
"I give, devise, and bequeath to Ontario Nature in the city of Toronto, the sum of $________ (or a description of a specific asset), for the benefit of Ontario Nature to be used for the following purpose: (state the purpose). If at any time in the judgment of the Board of Directors of Ontario Nature it is impossible or impracticable to carry out exactly the designated purpose, they shall determine an alternative purpose closest to the designated purpose."
Residuary bequest language:
"All (or a specific % of) the rest, residue, and remainder of my estate, both real and personal, I give to Ontario Nature in the city of Toronto, for its general purposes."
Gifts of Life Insurance
Life insurance is a way to make a significant future gift at an affordable current cost without reducing the value of your estate available to family and friends.
Making Ontario Nature the owner and beneficiary of an existing or new policy entitles you to a current donation receipt on the cash surrender value (if any), and further receipts on payment of subsequent premiums.
An alternative is to simply name Ontario Nature as beneficiary. Instead of current donation receipts your estate receives a donation receipt that can be applied to the estate when the policy proceeds are received.
Charitable Gift Annuities
A charitable gift annuity is a good way of ensuring an income for yourself while both receiving an income tax benefit and assisting Ontario Nature. In this arrangement, you donate funds to Ontario Nature and Ontario Nature buys an annuity for you with part of it. You receive a fixed income from the annuity for the remainder of your life. Depending on your age, this income may be entirely tax free, because CRA considers the income payments to be a blend of capital and interest and only the interest portion is subject to income tax.
The following is an example of how a charitable gift annuity works:
John Jones makes a donation of $100,000 to Ontario Nature. Ontario
Nature purchases an annuity from an annuity issuer, which costs Ontario
Nature $75,000. The remaining $25,000 is an immediate gift to Ontario Nature.
John receives an annual income of $10,000 (at an interest rate of 10 percent per annum). Of this amount, $6,944 is not subject to tax and $3,056 is subject to tax. John’s income tax is $l,528 (assuming tax at 50 percent). His after-tax annual income from this annuity is therefore $8,472.
In addition, John Jones is entitled to receive a charitable donation receipt from Ontario Nature for the $25,000 of his donation that remains with Ontario Nature. He may apply the donation tax credit towards his other income in that year, as well as carry forward any excess credit for a period of five years.
Charitable Remainder Trusts
A charitable remainder trust is another method of planned giving that is of interest to people who wish to make a sizable contribution on their death and who require the income from their assets during their lifetime. Under a charitable remainder trust, a donor transfers his or her assets to a trust (the trustee is usually a trust company), and the income from those assets is paid to the donor for life. Upon the donor’s death, the assets are transferred to Ontario Nature without the necessity or costs of probate and estate administration.
If you choose this method of giving, you will receive a charitable donation receipt for income tax purposes, the amount of which will depend on your age and life expectancy. You may use the tax credit to reduce your income tax in the year the gift is made and for five years following. Also, you no longer need be concerned about the administration of your assets, since that is the responsibility of the trustee appointed.
Gifts of Securities
When you sell publicly-listed securities, including shares, bonds, and mutual funds that have increased in value, 50% of the capital gain is taxable.
If you gift the securities by transferring ownership to Ontario Nature, none of the capital gain is taxable. In addition, you receive a donation receipt for the full value of the securities.
Please print and complete the following
Gift Of Securities form if you are interested in making a gift of publicly traded securities.
Making a Charitable Gift of RRSPs, RRIFs, or Pensions
Many individuals have, as part of their retirement plan, tax-deferred instruments such as RRSPs, RRIFs, or pensions.
Saving for your retirement is an essential part of a complete financial plan. However, your strategy should also consider what happens to your RRSP or RRIF when you pass away.
Upon your death, where a surviving spouse is not a named beneficiary, these registered savings are deemed to be disposed of and 100% of the remaining balance is added to your income in the year of death. The tax liability resulting from this disposition will be born by your estate. If other income was earned prior to death, this could easily be subject to tax at the highest marginal tax rate. At death, the total value of these funds must be reported as income and are fully taxable to the owner's estate. While the loss of close to 50% of tax deferred funds is unavoidable, individuals do have the choice of whether to give the money to the government or to a charity such as Ontario Nature.
For many donors, an RRSP or RRIF plan will contribute significantly to income in the year of death. Since Canadians can now receive tax credits for charitable gifts of up to 100% of their income in the
year of death (and retroactive one year) – gifting your RRSP or RRIF plan to Ontario Nature through a beneficiary designation or a bequest gift in your will is a very effective way to support nature.
Two possible ways of using your RRSP or RRIF to make a gift to Ontario Nature are:
1. Make Ontario Nature the beneficiary or alternate beneficiary of your RRSP or RRIF plan. Upon your death, or that of your spouse, Ontario Nature receives the balance of the asset directly from the financial institution. Your estate receives tax credits for the charitable gift to offset the tax on income. Because the asset passes outside of the estate, no probate fees are payable on the asset, resulting in additional tax savings. Using this method, Ontario Nature has no involvement in your estate and receives your gift in a timely fashion.
2. Make your estate the beneficiary of the RRSP or RRIF after your spouse, and gift an equivalent amount to Ontario Nature through your will, either as a fixed dollar amount or as a percentage of the total estate. You may also gift the asset specifically by naming it‘s account number and financial institution. If your spouse survives you, then the spouse's will should provide for a similar bequest. A receipt will be issued to the estate to offset the tax on the registered savings payable by the estate. Using this method, the asset is included in the estate and probate fees are payable on it.
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