Gift of Charitable Remainder Trusts

Charitable remainder trusts provide flexibility when planning your Estate, and offer a means of directing your assets and making future gifts to a charitable organization you support, such as the Royal Canadian Legion.

A charitable remainder trust can be funded with cash, securities or real estate. Assets are placed with a trustee —an individual or entity capable of man­aging the trust expertly. You receive the income generated by the assets in trust, according to the terms set out at the time the trust is established. The capital remains intact, however, and the Legion receives the amount you placed in trust after your death. It is also possible to establish a trust that provides income to your surviving spouse. In this instance, the property would pass to the Legion only after both spouses have died.

Because charitable remainder trusts are irrevocable gifts, the donor is usually entitled to a donation receipt when the trust is created. The receipt amount is based on the present value of the re­­­­­­­­­­mainder interest (usually 20 – 60% of the value of the property), determined by the fair market value of the assets, interest rates, the donor’s age, and the specifics or duration of the trust.

A financial advisor can help you determine how to establish a trust that best suits your wishes and circumstances.

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Benefits of Charitable Remainder Trusts:

A charitable remainder trust offers these benefits:

• It enables you to support causes which you believe in, while still providing for those you care about most.
  You may want to ensure that you provide sufficiently for your spouse after your death. However, you may also wish to make a significant contribution to the work of the Royal Canadian Legion. You can establish a trust that will pay a reliable income to your spouse. Upon your spouse’s death, the capital in the trust will go to the Red Cross as you wished.
• A trust provides for expert financial management and steady income.
  This can alleviate concern while ensuring reliable funds for you, your surviving spouse or other heirs.
• The trust property is removed from your Estate.
  This reduces probate fees and ensures that your charitable gift cannot be challenged, as it could in your Will.
• The charity will not be taxed on any capital gain, whether the assets are sold by the trustee, or eventually distributed to the char­ity and then sold.
  In addition, as the donor, you are only responsible for the capital gain that is attributable to the remainder interest.
• You can receive tax benefits for the gift during your lifetime
  Because charitable remainder trusts are irrevocable gifts, you may qualify for a charitable donation receipt at the time the trust is established. Commonly, a tax receipt is issued for the value of the residual interest that belongs to the charity.

A charitable remainder trust can provide flexibility when planning your Estate, allowing you to meet your obligations to loved ones while enabling you to leave a legacy to the Royal Canadian Legion.  By planning your gift, your generous fore­­­­­­­­­­­­­­thought will help the Legion continue to help people during disasters and personal crisis.