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Charitable Life Insurance

Life Insurance is an excellent estate planning tool and it can be used to create a significant gift to Seeds of Hope Children’s Ministry. With a relatively low investment in premiums a significant charitable asset can be created and given to Seeds of Hope.

You can purchase a new policy, name Seeds of Hope as the owner and the beneficiary, and maintain the policy by paying the premiums and receive a donation receipt for the premiums paid annually.  At your passing a significant gift would go to Seeds of Hope.

Or you could name Seeds of Hope as a beneficiary or co-beneficiary of that new policy or any existing policy. At your passing, the life insured amount would go to Seeds of Hope and your estate would receive a donation receipt to be used as a tax credit.

You can donate an existing policy that you had purchased previously when your family was younger and name Seeds of Hope as owner and beneficiary. Rather than cancel that policy, you can maintain that policy by paying the premiums and receiving a donation receipt annually for the premiums paid. That donation receipt in turn can generate a tax credit to offset taxes.

If that existing policy has a cash surrender value, the charity could cash it in and issue you a donation receipt that can be used to generate a tax credit.

Living Sponsorship

What if something happens to you?  What will happen to your sponsored child?  We’ve established a Living Sponsorship program, a prepaid sponsorship that allows you to provide for the needs of your sponsored child and give them the opportunity to become a fulfilled Christian adult even in the event of your passing.  We will calculate the amount required to complete the sponsorship, including gifts if you request them.  This sponsorship can be funded through a cash gift, a gift of securities or through a beneficiary designation on a life insurance policy.

Once the gift is made, you will receive a charitable donation receipt for the full amount.  A living sponsorship is the most seamless way to continue sponsorship after death of a sponsor.  Bequests can take up to 24 months to settle, before a charity might receive the gift.  Most importantly, you will receive peace of mind knowing that, no matter what your future may hold, your sponsored child will be cared for through your living sponsorship.

Gift of Securities

You can donate almost any kind of property in many different ways. The most significant tax benefits will be available if you give stocks, mutual funds and bonds directly. You will receive a tax receipt for the market value of your donated assets, and also avoid paying capital gains taxes-a double benefit.

Giving appreciated securities directly to Seeds of Hope Children’s Ministry might be more beneficial in terms of taxes than giving cash.

If you donate listed securities, such as stocks, bonds, and mutual funds directly to Seeds of Hope, there is no capital gain tax to be paid. However if you cashed in the securities, 50 per cent of the appreciated capital gain is added into income and then open to tax. After paying the taxes, the amount of the gift to the charity is reduced and therefore the amount of the donation receipt is reduced, reducing your charitable donations tax credit as well.

However, by having your broker transfer the securities directly to the broker of Seeds of Hope, you give a larger gift, pay no tax on the capital gain and receive a larger donation receipt which generates a larger tax credit.

Bequests

A Bequest is a gift you leave to Seeds of Hope Children’s Ministry in your Will.   You should create a Will because it is good stewardship, it is an excellent gift instrument and it can be used to leave a legacy to your favorite charities.  A will is the cornerstone to any estate planning.  It is also the last communication you will have with your family and it is another opportunity to reaffirm your priorities and values to them.   If you die without a will, your assets are distributed according to provincial laws, and you have no control over the distribution.  You cannot adequately protect your loved ones and your dependants without a will.

Continuing your commitment to honouring the Lord with what He has given,  you can designate a percentage of your assets in your will to Seeds of Hope Children’s Ministry, as well as care for your family.  It’s easy to make a gift through your will.  After caring for your loved ones, you can give to the organizations and ministries you support.

Without estate or tax planning in your will, it is possible that the government could become an equal beneficiary of your estate. A significant tax event occurs when a person who is single passes away or if the remaining spouse passes. In most circumstances, tax sheltered funds – such as pensions and Registered Retirement Savings Plans – cannot be rolled over to anyone else. They must be taken into income and taxes are to be paid.

Charitable donations can offset those taxes to varying degrees, allowing more of your money to go to Seeds of Hope and your loved ones. Though most people give because they want to further our ministry, it is wise to consider how you might offset some of the tax implications when your whole estate is liquidated.

Gift of RRSP/RRIF

The tax advantages of a RRSP generate significant benefits during a person’s lifetime. Prior to retirement, funds invested in registered plans are tax deductible and then these funds grow in the tax deferred plan. But eventually the tax has to be paid. How might you reduce these taxes?

The ultimate benefit of a Registered Retirement Savings Plan (RRSP) is once you retire and need to withdraw these funds you will most likely be in a lower tax bracket because you are living off of a reduced income.

However, you may find during your lifetime you are in a financial position to donate a portion of these funds to charity and offset the tax implications with the charitable donation receipt. Everyone’s situation will vary, and you should be sure to consult your financial advisors regarding the tax ramifications.

If a person is married and passes away, the tax sheltered funds of an RRSP can be rolled, tax free, over to the remaining spouse.  If the person is single, or the remaining spouse to pass away, a significant tax event occurs. Those funds that have been tax sheltered are now brought into the estate and are considered income, with any other income, and taxes are due on the whole amount.

You can offset the taxes if the funds are given in your will to a charitable organization like Seeds of Hope. The donation receipt generates a tax credit that can, in most cases, offset the tax owing on the RRSPs.

Another option is making Seeds of Hope the final beneficiary on a RRSP, Registered Retirement Income Fund (RRIF), or other registered pension plan. The gift bypasses the probate process and estate administrative costs are reduced. Again the donation receipt can offset taxes owing on these funds.

Please consult your financial advisor regarding gifts of registered retirement funds, and how best to offset taxes so as to leave more in your estate for distribution for loved ones.

Gift of Real Estate

Property is often the largest asset that we own and yet it is not easily liquidated. But with proper planning it can be donated to Seeds of Hope, resulting in some significant tax benefits while providing a generous gift to ministry.

When sold, property other than your principle residence is open to capital gains tax, as half of the appreciated value or capital gains has to be declared as income. It is then taxed at your marginal tax rate. But if that property – residential, commercial or undeveloped real estate – is given to charity, you would receive a donation receipt equal to the appraised fair market value of your property. That donation receipt can be used as a tax credit, which should exceed the capital gains tax on that property, and offset other taxes as well.

If the gift is your personal residence, there would be no capital gains tax, and the tax credit generated would offset other taxes. Besides outright donations of real estate there are other options that allow you to live in the residence for your lifetime or retain a fractional interest in the property.

Memorial Gifts

Memorial gifts are a unique way for you or others to honor the life of your loved one. It comes from the heart, for the benefit of many others.

Gifts in Honor

Honor gifts celebrate the accomplishment of your loved ones-a gift honoring a special birthday, anniversary, achievement, or just because.  As well as making a tribute to your loved one, these special gifts impact the lives of others.

Each of these planned giving options needs careful attention and prayerful consideration. If you would like to talk to someone to learn more about how you can give in this way, please contact us. We would be pleased to help you find the right balance in planning your legacy.

Canada Helps accepts your securities or mutual funds as a method to donate which saves you Capital Gains Tax. When you donate your securities directly through CanadaHelps, those capital gains aren’t subject to tax. This means Seeds of Hope Children’s Ministry receives a larger gift, and you’ll benefit from a tax receipt for the full value of your eligible securities or mutual funds.