Charitable remainder trust

You may wish to ensure a donation is made but also wish to retain the use of the property, or receive the income from the investment(s) during your lifetime. It is possible to make such a donation and receive a tax receipt for use against your income generated in the five years following through the creation of what is known as an inter vivos (living) charitable remainder trust.

This can also be accomplished through your Will by a testamentary trust, which gives a receipt to your estate in the tax return filed at death. The gift can be real estate or tangible assets, such as securities or a work of art.

Of course, there are tax consequences that must be considered.

When the gift is made, a gain or loss can arise. However, if you have set up a charitable remainder trust in your lifetime there is no deemed disposition of the trust at death; nor is the property included for the calculation of court fees on your estate because the property does not form part of your estate. You must take care in establishing a gift of this nature, because Revenue Canada has strict requirements that must be met:

  • Your gift must be made voluntarily with no expectation of rights or future benefits
  • You cannot take the gift back at any time or in any part (it is irrevocable)
  • You must establish that the Foundation will eventually receive full ownership of the property the size and value of the donated interest must be ascertained for tax receipt purposes

If you would like more information about charitable remainder trusts or any other legacy gift, please contact:
Susan Dusick
(519) 749-6578 ext. 1514