Trails mission is to challenge and equip vulnerable youth to become contributing members of the community. This is not a short-term response to a one-time crisis; rather, it is a long-term preventative programme that creates lasting change in the lives of our participants and their communities. By leaving a legacy gift to Trails, you can continue to support our work, build stronger communities and inspire hope in your lifetime and beyond. The values you uphold will continue to shape the lives of those who come after you and your gift to Trails will help create a lasting difference in our community. This type of giving can also provide important tax benefits for you. Below are a few examples of legacy gifts.
A charitable bequest in your Will offers an opportunity to reduce estate taxes while making a gift to Trails that will express your values and provide continued support for our programme that offers hope to vulnerable youth and inspires change
Since a person is deemed to have disposed of everything at the moment of death, there are considerable tax implications for most estates. Taxable income at death includes 50% of any capital gains on appreciated assets or investments (except for your principal residence), and the entire value of an RRSP portfolio (unless a surviving spouse, financially-dependent child or grandchild can take it over).
When a donation is made from an estate, Trails Youth Initiatives, Inc. issues a receipt for the amount of the gift. The Executor can use the receipt to obtain tax credits to offset 100% of income (including RRSP assets and capital gains) from the current tax year and the previous tax year.
Aside from tax considerations, bequests have a number of other advantages as well:
Another way to donate to Trails is to set up a new “permanent” (whole or universal) life insurance policy, or to transfer the ownership of your existing permanent policy to Trails and then name Trails Youth Initiatives, Inc. as beneficiary. You may choose to continue paying the premiums or have Trails make the premium payments. This may be especially beneficial to many people who have life insurance policies they no longer need for their originally intended purpose, such as family protection, a business that no longer exists, education, etc.
For tax purposes, there is an immediate tax credit for the amount of the cash surrender value of the donated policy plus any accumulated interest and dividends that are also assigned (less any outstanding policy loan). Furthermore, if you continue to pay the annual premiums on the policy, or contribute the funds to Trails so that we may pay the premiums, the premium payments will be treated as additional charitable gifts. This enables you to claim an annual donation tax credit for the premiums paid. Ultimately, a relatively small contribution can turn into a very sizable gift to Trails on your death. Note that there would be no further donation tax credit at that time on the payout of the life insurance proceeds.
As an alternative to the above strategy, you may name your estate as beneficiary of your life insurance policy and then include a gift to Trails in your will equal to the amount of the life insurance proceeds. This method allows you to retain control of your policy so that the beneficiary may be changed by simply amending your will. However, no tax credit is available for the premiums paid, as with the gift of policy noted above.
When your insurance proceeds are paid to your estate, and the directed bequest is paid to Trails Youth Initiatives, Inc. in accordance with your will, a donation receipt would be issued for the amount of the full gift, which would create a large tax credit. This can be applied to reduce taxes payable in the year of death and in the immediately preceding year.
Naming Trails as the beneficiary of your life insurance policy or RRSP/RRIF plan is another effective way to donate. The proceeds of your life insurance policy or RRSP/RRIF that are designated and paid directly to Trails are considered to be a charitable gift made by you in your final year. This allows you to retain control of the policy and RRSP/RRIF plan in your lifetime and then receive a tax receipt for the full amount of the gift at your death, creating a large tax credit to reduce taxes payable in the year of death and in the immediately preceding year.
This option further allows the proceeds to pass to Trails completely outside of your estate, which will eliminate probate fees on the proceeds.