Ways to Give
Planned Giving
Keeping Focused.
Travelers use maps. Builders use blueprints. We all need a plan to help us achieve our goals.
What are some examples of Planned Gifts?
Endowments
Bequests
Securities
Life Insurance
Annuities
Pooled Income Funds
Charitable Remainder Trust
Residual Interest
Gifts in Kind and Real Estate
What is a Legacy Gift?
What are the benefits of Leaving a Legacy?
Legacy Giving in Action (Richard E Hinton)
Why are Legacy Gifts so important?
How can I find out more about Legacy Giving?
Endowments
Endowments are sometimes referred to as "everlasting gifts". With most types of legacy giving, setting up an endowment is an additional option. Gifts identified as endowments remain intact and only the earned interest is used by the charity.
Gifts established as endowments are eligible for charitable tax receipts.
Satisfaction comes from knowing that the gift you are making will go on working for the benefit of others, after you are gone.
Endowments are important to charities, as they establish a basis for long-term planning.
Often a family will set up an endowment in the name of a loved one and can contribute to the fund over a number of years.
Endowments can also be set up from the various legacy gifts options described below.
Bequests
Bequests are probably the most common form of leaving a legacy. When your estate is settled, the charitable gift stipulated in your will is forwarded to the charity you had chosen. Then, your estate is issued a charitable credit for the full value of the bequest.
Bequests can be designated for a specific purpose or can be "unrestricted". In the latter case, the charity would place the gift toward the area of greatest need. Bequests can take the form of cash, property or securities.
The benefits of a bequest are that you get to use your assets during your lifetime and your estate receives a tax credit when the gift is made after your death. Also, you can tailor the details of your bequest to make it meaningful to you personally.
Securities
Gifts of securities are gifts of publicly traded stocks, bonds or mutual funds.
Recent tax changes can mean that donors save half of their capital gains tax on the transaction – in addition to receiving a charitable receipt for the amount of their gift.
This type of legacy gift enables a donor to make a substantial charitable gift, while not tapping into current or future cash resources.
Sometimes the tax advantages are so significant in this option that when utilized in combination with other financial planning strategies, may actually not deplete their estate value at all.
Life Insurance
A significant benefit of planning a legacy through insurance policies is that you may receive tax benefits immediately. By purchasing a life insurance policy now and transferring ownership to the charity of your choice, you will receive tax receipts for the premiums you pay each year.
Tax regulations for gifts made through life insurance bring maximum tax credits, often making this type of planned gift more beneficial than a cash gift left through your estate.
As an option legacy you may purchase a life insurance policy and have the benefits payable to your estate. Then, through the stipulations of your will, the estate could make a charitable gift which would create tax credits that would offset capital gains taxes.
Existing policies may be transferred, or new ones may be taken out.
A gift of an insurance policy does not reduce the size of your estate.
Annuities
This unique legacy giving opportunity provides income for you, while you are making your charitable gift. A gift annuity enables you to make a gift and at the same time, receive guaranteed income for their lifetime. The residue goes to the charity.
Part of original principal may be eligible for an up-front tax receipt.
Income to you from annuity is non-taxable.
You get to see their gift being put to use during your lifetime.
(Donors must be 60 years of age or older.)
Pooled Income Funds
The name describes this legacy gift well. A charity accepts gifts from many donors into a fund and distributes the income of the fund to each donor – or recipient of the donor's choosing.
Each donor receives income in proportion to their share of the fund. For making a gift to a pooled fund, a donor receives a charitable income tax deduction and may avoid capital gains tax.
When an income beneficiary passes away, the charity then receives your portion of the fund.
Charitable Remainder Trust
This legacy gift can provide not only for the charity, but also for the donor.
You, the donor creates a trust fund which establishes an irrevocable gift of the remaining interest for the charity – and retains the interest income for you for your lifetime or for a set period of years.
Only the interest can be used and cannot encroach on the principal
The donor will be entitled to a donation receipt for the present value of the remainder trust
This type of planned gift is ideal for donors 65 years or older, who wish to make a charitable gift but still need the income the trust can provide
The George E. Wilkinson Fund is an example of a Charitable Remainder Trust. Legacy Giving in Action: To encourage Island students to pursue a career in nursing, the Board of Directors of the Prince County Hospital Foundation has directed the establishment of entrance bursaries for students entering the Nursing program at the University of Prince Edward Island. These awards are made possible through a bequest from the Estate of the late George E. Wilkinson and endeavor to fulfil his intention to support the education of nurses from the Prince County Hospital region and to encourage them to consider spending part of their career at the Prince County Hospital.
Residual Interest
Similar to a Charitable Remainder Trust, except it refers to gifts of tangible property, such as real estate or art work.
Ownership of the gift is transferred to the charity, but you retain possession until a later date.
Gifts in Kind and Real Estate
Gifts of tangible property are often given to charities, for the enrichment of surroundings and the pleasure of many
Gifts worth $1,000 or more must be independently appraised in order to establish fair market value, which will define the amount of the charitable tax receipt
Contribution limitations for gifts-in-kind are the same as for gifts of cash
Real estate is not considered to be tangible property, but similar guidelines apply
What is a Legacy Gift?
People leave gifts to Prince County Hospital in their wills, or through insurance, for a variety of reasons. You make the arrangements now, by choosing what form and size of gift to make, and the hospital receives this gift upon your passing. It allows you to write the last chapter in your life, if you wish, and it can also offer significant tax benefits.
What are the benefits of Leaving a Legacy?
Legacy planning can improve financial position, and can enable many to make a bigger impact than ever thought possible. With sound financial planning, gifts of this nature enable donors to enjoy a tax advantage, while making a significant difference in your community.
In summary, here are the chief benefits you when you make legacy gift:
- Significant tax benefits while maintaining financial security for you and your family
- Ability to make a larger gift to charity than otherwise might be possible
- Founding a commemorative gift to someone special
- Providing for endowment which will help future generations
- Helping to avoid or reduce capital gains taxation
- Passing assets on to family members at a reduced tax cost
- A better equipped hospital, meaning better care for you and your family for years to come
The chief benefits to PCHF are:
- Long term stability for carrying out our mandate to provide priority medical equipment and technology
- Security for future financial planning
- Ability to recognize donor generosity in the long term
Legacy Giving in Action
The Richard E. Hinton Memorial Fund
Richard Hinton was a pivotal Board Member of the Prince County Hospital for many years. Until his death in 1997 he spent his life supporting the needs of the hospital and encouraging others to do so.
Homecare is a service provided by the Department of Health which helps people make the transition from the hospital to home, or allows people in the East Prince area to remain at home when that is deemed the appropriate place for them to be. Often what hinders many people from choosing this option is access to appropriate homecare equipment.
It was the wish of the late Mr. Hinton and his family to establish a fund which provides equipment partly for Prince County Hospital, and partly for Homecare. The Richard S. Hinton Memorial Homecare Fund, enables $20,000 annually to be given by the Foundation to provide needed equipment for Home Care to assist residents of East Prince to remain at home or return home from the hospital when that is the most appropriate place to be.
We are truly grateful for Mr. Hinton's generosity and foresight, which will make a real difference in the lives of others.
Why Are Legacy Gifts So Important?
Previously, Canadians looked to their governments to provide the essentials which marked our quality of life. Increasingly, however, government cutbacks and program realignments have meant that individuals and corporations are having to fill the gaps left behind. Recognizing the impact this was creating, recent federal budgets have contained tax incentives which are designed to encourage charitable giving. Gift planning can improve a donor's financial position, and can enable many to make a bigger impact than they ever thought possible. Charitable giving by individuals and corporations is not intended to replace government's core funding, but rather to enhance and expand it.
How Can I Find Out More About Legacy Giving?
A recognized financial advisor is the most appropriate source of information about legacy giving. Please refer to your telephone directory yellow pages, for the financial planner nearest you.
Prince County Hospital Foundation has also developed a general information package which we would be happy to provide to you. Contact us for more information.
