Charitable Remainder Trust
What is a Charitable Remainder Trust?
A Charitable Remainder Trust is a complex gift, but a great tool for the right donor in the right situation.
With a Charitable Remainder Trust, you sustain the benefit of an asset but transfer the formal ownership of this asset to CNIB.
Once all of the requirements for making the gift are satisfied, a tax receipt can be issued for the value of the residual, or remainder, that will ultimately pass to the charity.
Is a Charitable Remainder Trust right for you?
A Charitable Remainder Trust may be a good gift for you if you are 75 years of age or older and ...
want to help people affected by vision loss through donating to CNIB.
are an investor who is comfortable with complex tax arrangements.
have an asset (or income) that you want to maintain for the remainder of your life.
have a good financial advisor who is comfortable using trusts.
can afford to lose control of the capital portion of an asset.
you are concerned about probate or estate issues (like estate freezes).
Considerations about a Charitable Remainder Trust
The gift of a Charitable Remainder Trust is irrevocable. Once you have made this gift, you cannot change your mind. Because of the irrevocable nature of this gift, you must get independent financial advice before deciding to commit to this kind of gift.
The process for accepting this kind of gift is complex. It may turn out, after investigation by your financial advisors and CNIB that this gift is not the best choice for you.
What are the benefits?
You can receive a discounted tax receipt today.
You can continue to enjoy the benefits of your asset. For example, you can continue to live in your home.
You can make a gift that is not subject to probate.
You will receive a charitable tax receipt, which will reduce taxes on other sources of income.
You'll help promote vision health and enhance independence for people with vision loss.
What will be your tax receipt?
The size of the tax receipt is determined by a set of formulas and actuarial tables that take into account factors such as your age, payment schedule and whether you are male or female.
For more information:
Ruth D'Souza
Some of this text appears courtesy of DeWayne Osborn CGA, CFP, with our thanks and appreciation.
Disclaimer
The above information is not intended as legal or financial planning advice. When considering any planned gift, you should always consult your legal advisor, banker, financial planner or your family members.