Gifts for the Future

Many Anglicans like you generously support their church’s ministry through their weekly offerings. However you may feel frustrated that you "cannot do more". Arranging a deferred gift, that is one that is arranged today but does not take effect until your death, can allow you to be far more generous while still meeting your cash flow needs today.
In fact, some gift arrangements allow you to increase your after tax cash flow and arrange a gift as well. The following are just some of the ways that a deferred gift may be arranged to support the church’s future ministry

Future Gifts

Will Power (Example PDF)

A will is a legal instrument through which you express your concern for the well being of your loved ones, further the causes that are important to you, and express your gratitude to God for the gift of life. A carefully drafted Will may not only reduce or defer unnecessary taxes, it can also allow you to appoint a trusted guardian to care for your children, provide for someone such as a family member of your choice to wind up your estate, and as well, support causes dear to you. Only with a Will is this possible.
Regrettably, an amazing number of people die without leaving a Will. When they do, they not only lose all control over the distribution of their estate but they create undo stress and financial costs for their family. To ensure that your wishes are carried out after death please contact a lawyer to arrange for the drafting of your Will. The peace of mind gained by arranging your Will is well worth the modest fee charged.

A gift through a bequest in your will provides the same tax advantages as an outright gift. A tax credit for approximately 46% of the gift is available for use on your final tax return, thereby reducing the amount of tax payable and increasing the amount left for your other heirs.

Those wishing to remember the ministry of the Anglican Church through a bequest to their parish, diocese or national church should contact the Diocesan office to ensure that the gift purpose is relevant and useful. Usually a gift for general purposes is preferred, thereby eliminating the concern that a particular purpose becomes obsolete in the future.

Also it is important to ensure that the correct legal name of the diocese or parish is used

Please send me a free booklet on preparing my Will

Life Insurance

New policies
Life insurance may be used to make a planned gift to the Church. A small annual

contribution in the form of insurance premiums yields a major gift. For many people, this

is an ideal way of expressing their Christian stewardship. When purchasing a policy

for the Church arrangements are made with the insurance company to transfer ownership of the policy to the Church. The Church will then issue you a tax receipt for the amount of the premiums you pay each year.

For example:
Ralph Zwicker, in his mid-40’s, would like to make a significant gift to his parish. He has no existing policy or assets to contribute but he does have some discretionary income, so he purchases a new $40,000 policy naming his parish as both owner and beneficiary, and pays for it in five annual payments of $1,200 each. He receives a donation receipt for each payment and, assuming a combined federal/provincial tax credit of 48 percent, his annual tax saving is $576. Thus his "net cost" for each premium is $624, and he makes a $40,000 future gift for only $3,120.

Existing policies
An existing policy may also be used to arrange a gift. You may have a policy that is fully paid but the original purpose for which the policy was purchased is no longer valid. Or perhaps your priorities have changed. We can find ourselves wanting to share our good fortune with those around us, to provide meaningful support for our church’s ministry, to leave the world a little better than we found it. When goals such as these take shape, the life insurance policy that served you well in years gone by can serve you in an entirely new way when you make a charitable gift.

Here are some possibilities:

Give the death proceeds. Marvin McNutt no longer needs the $25,000 death benefit from the policy he took out years ago when his family was young. So he decides to have the Diocese receive the proceeds payable at his death in trust for his parish. When he dies, his estate will receive a donation receipt for the amount of the death benefit, resulting in significant tax savings on his final return. If the donation receipt exceeds 100% of his income in that year, the excess can be carried back to the previous year, and the 100% limitation will apply to that year’s income as well.

Give the policy itself. Nancy MacDonald, age 75, had almost forgotten her paid up $50,000 policy until she began thinking about establishing an endowment with the Diocese in memory of her husband. She depends on the income from her other investments, but the insurance policy makes an ideal gift. Because she makes the Diocese the beneficiary and also the owner of the policy, her gift is irrevocable, and she receives a donation receipt for the cash value of the policy, creditable up to 75 percent of her income (excess credit may be carried forward up to five years). Nancy’s policy is paid up, but if premiums were still owing and she continued to pay them, she would receive donation receipts for those payments as well.

There are other ways, too, in which life insurance can enable a donor to make a significant charitable gift.

Using life insurance for wealth-replacement. Marva and George Sweeney, both age 60, want to contribute $100,000 to The Primate’s World Relief and Development Fund without diminishing their legacy to their children. Assuming a tax credit of 48 percent, they realize tax savings of $48,000 over several years by making the gift, so they plan to use a portion of these savings to purchase a "second-to-die" policy which will add $100,000 to their estate when the surviving spouse dies.

Using annuity income to make a life insurance gift. Maurice Burke, 68 years old and in the 48 percent combined tax bracket, has $100,000 in bonds and GIC’s from which he receives after-tax income of $350 per month. He uses this asset to purchase a commercial annuity which provides him after-tax payments of $830 per month. He then allocates $300 of this increased cash flow each month to pay the premiums on a $100,000 life insurance policy which he purchases in the name of the Diocese and his parish. He receives a gift receipt for every premium paid, and at his death, the insurance proceeds will be his gift to diocesan and parish ministry.

Life insurance can be a flexible and generous method to plan a gift and help you achieve your personal and philanthropic goals. We suggest that you consult with a trusted financial advisor to ensure that your needs and those of your family will be met.

Charitable Remainder Trust

The charitable remainder trust can be a useful life income gift. Under this arrangement, you transfer property--which may include cash, securities or real estate -- to a legal trust managed by a trustee who invests the assets and distributes the net income to you and/or other persons you designate for life or a term of years. The trustee may be a qualified trust institution, or yourself, if you wish. At the termination of the trust, the principal passes to church to be used as you have specified.
The tax benefits of a charitable remainder trust also differ somewhat from those of a gift annuity. At the time of your gift, you are entitled to a donation receipt for the "charitable remainder"-- the value, in today’s dollars, of the gift the church will receive when the trust ends. Again, the maximum amount of the receipt creditable is 75 percent of your net income, and any excess may be carried forward up to five years.

If the trust is funded with appreciated securities only 50% of any capital gains triggered by the disposition of the securities will be taxable. Please note that this gift is not entitled to the reduced inclusion rate applicable for the donation of securities, as the securities are not being donated directly to the church.

Unlike the fixed payments from a gift annuity, the income payments from a charitable remainder trust will fluctuate with the performance of the investments. In any case, the assets transferred to the trust are removed from your probate estate, reducing future probate fees, preserving privacy, and lessening the risk of legal challenges.

Gift of Residual Interest

The gift of a Residual Interest is similar to a Charitable Remainder Trust. This gift pays you "life income" of a non-monetary sort: it makes it possible for you to contribute your personal residence to the church now and receive significant tax savings, yet retain the right to occupy the home for the rest of your life (and your spouse’s life, if you wish) or a specified term of years.

You receive a donation receipt for the "residual interest"-- the value in today’s dollars of the property the church will receive at a future time. As with other gifts, the donation receipt is creditable up to 75 percent of your net income in the gift year, and the excess may be carried forward up to five years. There is no taxable gain on the disposition of a personal residence, so you will have the full benefit of the tax savings allowable during the reporting period.

While you continue to occupy your home, you will be responsible for maintenance and such other expenses as are specified in your written agreement with the church. If you wish to give up the home before your death, you may rent it and retain the rental income, relinquish your life interest early and receive an additional donation receipt, or, by agreement with the church, sell the residence and receive a share of the proceeds.

Gift of Retirement Plans

Many Anglicans have accumulated registered savings plans such as RRSP’s and RRIF’s.
When reviewing your financial and estate plan you may discover that, in the event of your death, the balance in your registered plan is not needed to provide for your heirs. Your other assets are sufficient. Therefore, you may wish to include a gift to your church in your plans.

With a few exceptions the entire proceeds of your registered plan will be included in your income in the year of death. These exceptions relate to an allowable spousal roll-over, where the tax on the proceeds is deferred until the death of the spouse, as well as some provisions for dependents. Your financial advisor can provide you with details. Generally, the collapse of a registered plan will greatly increase your taxable income and taxes owing, and reduce the amounts available to your heirs. In Nova Scotia and Prince Edward Island almost 50% of the value of the fund will be consumed in income tax. You could say that your designated heirs and Canada Customs and Revenue Agency both will share your plan assets equally.

By naming your parish or diocese as beneficiary of your plan you will not only be supporting your church’s ministry but the entire proceeds of the fund will be available to the church with no net tax cost to your estate. This is because the tax credit your estate receives for the donation will offset the income tax payable. Here’s how it works.


Balance in RRSP $100,000
Amount of charitable gift $100,000
Amount of plan included in taxable income $100,000
Income tax payable (assuming 46% marginal tax rate) $ 46,000
Tax credit $ 46,000
Net tax payable $ 0

Of course there will be situations where an individual will want a portion of the plan’s value to go to family members. In this case a portion of the value could be donated to church. While the remaining portion paid to family members will be subject to tax the amount paid to the church will produce a tax credit offsetting taxes owing on that portion.

Gift of RRIF Funds

Age 69 is a financial planning watershed for many. At this age RRSP’s must be collapsed and, if taken into income, taxes will consume almost half the value. However, the plan may be converted to a RRIF or annuity with only the annual income taxed. In reviewing your retirement plans with your advisor in preparation for the rollover you may find that you can afford to contribute a portion of your plan to the church and use the remaining funds to contribute to a RRIF or annuity. This will decrease the retirement income from this source, but if you have adequate income from other retirement sources this may not be a problem. The portion withdrawn for the donation will be taxed but the tax credit from the donation receipt will offset the taxes owing.

Alternatively, as with an RRSP, you could name the church as the final beneficiary of the RRIF, again with no tax cost for the gift.

Registered funds provide a good opportunity to include a charitable gift in your financial and estate plans. By doing nothing almost half of your plan will be given to the government through taxes for social spending. The alternative is to direct the social spending yourself by designating a charitable recipient of the proceeds of your RRSP or RRIF.

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