Asset Preservation

• Registered Asset Preservation Plan
• Estate Preservation Plan
• Trusts for Protection and Tax Savings
• Charitable Giving
• Critical Illness
• Cottage Planning

Estate & Insurance Services

Charitable Giving
A desire to help people is ample motivation for Canadians to participate in some form of charitable donation program. However, making a donation to a registered charity can also provide some very attractive income tax benefits - both today and upon death.

What You Can Give:

Cash
Most commonly donated during yearly fundraising campaigns. The savings in taxes could be up to 48% of the donated amount. This would be in the form of a donation credit. There is a carry-forward privilege of five years for excess donations in your lifetime. In the year of death the excess donations can be carried back to the year before death.

Securities
You can gift publicly traded shares to a charity rather than selling them and donating the cash. Only one-half of the capital gain has to be reported on your tax return. The end result is that you only pay half the tax owing had you just sold the shares and donated the proceeds.

Life Insurance
There are two primary ways to donate a life insurance policy. Each method has a different tax treatment:

• Make the charity the owner and beneficiary – If an existing policy is transferred to the charity then the donor will receive a tax receipt for the cash surrender value. There may be a tax liability if the cash surrender value in the policy exceeds the adjusted cost base. All premiums paid by the insured after the transfer are tax deductible. Once the charity receives confirmation from the insurance company that the premium has been paid, then the charity issues a tax receipt to the insured.
• The insured is the owner and the charity is the beneficiary – The charity would receive the death benefit proceeds. Your estate would receive a tax receipt for the full amount of the insurance proceeds. As owner, you are free to change the beneficiary if so desired.

Life Annuities
You can make a lump sum contribution to a charity and receive a lifetime stream of income. The charity would purchase a life annuity from an insurance company on behalf of the donor. A tax receipt, which is based on life expectancy, would be given to you for the amount of the gift which exceeds the expected annuity payments. If you are concerned about reducing the value of your estate then a life insurance policy could be purchased to replace the capital donated to the charity.

Whatever strategy you choose, charitable giving can be very rewarding.

For more information, contact an Investment Advisor at a BMO Nesbitt Burns branch near you who will be pleased to introduce you to an Estate and Insurance Advisor.

If you would like a BMO Nesbitt Burns Investment Advisor to contact you, simply complete this brief contact form.

Note: All insurance products are offered through BMO Nesbitt Burns Financial Services Inc. by licensed life insurance agents, and, in Quebec, by financial security advisors.