Using Link Charity as a Channel

In many ways, a Will acts as a channel for your earthly goods.  Link Charity could be a useful tool when it comes to settling your estate.  They offer a simple and effective solution by acting as a channel to receive all your estate charitable gifts by distributing the total proceeds to multiple charities in one Letter of Direction outlined by you.

The Benefits are:

1. A letter of direction can be changed at any time.  This is far more convenient and flexible than having the Will amended by codicils drawn up by your lawyer.  Furthermore, a letter of direction could contain more instructions as to how each charity is to use its money, simce these letters can be changed so readily.  This allows you to target more current or more limited objectives.
2. Would you like one or more charities to receive a gift from your estate anonymously?  Simply leave the gift to Link Charity with that instruction.  Your estate receives the charitable receipt from Link Charity, but the recipient charity will not be informed of your identity.
3. Want more privacy?  Any beneficiary that is left a percentage or a share (rather than a fixed sum) has a right not only to a copy of the full Will, but also an inventory of all the assets, and has a right to a full accounting from the executors to make sure fair value was received for all assets.  Instead of many charities seeing these details, Link Charity can do all these things for you and for your family.
4. Want to reduce the work for your executors?  Many Wills include eight or ten charities.  That’s work for the executors.  Executors send a notarized copy of the Will, assets inventory, send instalment cheques, and final cheques.  They also have to obtain clearances and receive receipts from the multiple charities.  It is more efficient to have one charity act as the funnel to leave the gifts to many charities.
5. Save potentially thousands of dollars in lawyer fees by using Link Charity’s letter of direction with your Will.

Learn more about Bequests – Letters of Direction at Link Charity here.

A Gift Annuity is an agreement between you and Chosen People Ministries. You transfer cash or securities to Chosen People Ministries and, in return, receive fixed payments for the rest of your life. You can even name someone else the beneficiary of a gift annuity.

Guaranteed payments:

• Your payment amount is fixed, and guaranteed for life.
• Generally, the older you are when your gift annuity begins, the higher your payment rate. This is because a portion of your gift will be returned to you over your life expectancy.
• Payments to match your schedule: monthly, quarterly, semiannually or annually (or even deferred for a few years!)
• Chosen People Ministries is legally obligated to make payments to you for as long as you live (or the person you’ve designated to receive payments).
• Tax Benefits:
  • A portion of your guaranteed annual payments are tax-free. As with the amount of your payments, the older you are, the greater the tax free percentage of each payment.
  • You receive a federal income tax deduction in the year you make the gift.
  • For gifts of publicly traded securities, you will partially avoid capital gains tax.

Trusts are formal legal arrangements designating a trustee to receive and hold legal title to property and administer the property according to your instructions. Trusts can arrange for any financial or administrative function.

Trusts can be very simple, or they can be as complex as necessary to meet your various financial, charitable and personal goals.

Who Might Set Up a Trust?

• Parents who want to establish a secure source of lifetime funding for a disabled or financially irresponsible child
• Owner of a closely held or family business with heirs likely to sell after inheriting
• Owner of low-dividend stocks that are worth significantly more today than when they were purchased, or majority of portfolio in employer’s company stock
• Retiring farmer with last year’s crop to sell and no expenses to offset income
• Owner of real estate or personal property free of any lien or mortgage that is not producing any income.
• What Types of Trusts are There?

  Charitable Lead Trust
  Charitable lead trusts are designed to provide income to Chosen People Ministries immediately and for a period of years, after which the property either reverts to you or passes to those you designate, typically your children or grandchildren. These trusts are most often used to transfer assets that are expected to appreciate in value to your heirs, effectively reducing gift and estate taxes. If you anticipate high estate and gift taxes, the lead trust may be an excellent vehicle for passing assets along to your heirs.

  Charitable Remainder Unitrust
  The charitable remainder unitrust is a popular trust that allows you to receive an income for life. The percentage of payout is determined at the time the gift is made. Your payments vary from year to year and you can make additions at any time. When the value of the unitrust increases, your payment increases, and vice versa.

  Charitable Remainder Annuity Trust
  The annuity trust is similar to the unitrust with one key difference, your payments are fixed and determined at the time you establish the trust. You also receive a tax deduction upon the creation of the trust.

What are the Advantages of Making a Gift of Securities?

• You avoid all capital gains tax when you contribute long-term appreciated securities to Chosen People Ministries.
• You receive a charitable income tax deduction equal to the fair market value of the securities if they have been held longer than one year.
• The fair market value can be deducted against up to 30% of your adjusted gross income and any excess deductions can be carried forward into as many as five additional tax years.

What if You Still Need the Income Generated by the Stock?

An increasingly popular form of securities gift is a life income gift. Under such arrangements, a donor makes a gift to Chosen People Ministries but continues to receive the income earned by the donated asset. The donor designates who the income recipient or recipients will be. This is a good way to give for a donor who wants to make a gift to Chosen People Ministries now but is uncomfortable about giving up the income derived from the asset.

Stocks that yield little income but are highly appreciated are excellent choices for funding a life-income gift. You can donate these assets to Chosen People Ministries. We can then sell them without incurring the capital gains tax. With the proceeds from the sale, Chosen People Ministries can buy higher yielding stock and pay you the higher income.

By using real estate to fund a gift, you may be able to make a gift to Chosen People Ministries of a size which would otherwise not have been possible. Whether it is a house, farm, vacation home, office building or plot of undeveloped land, your property can be a very helpful gift for you and for Chosen People Ministries.

A real estate gift can provide you with a combination of advantages and tax savings. Some of the benefits of a real estate gift accepted by Chosen People Ministries include:

• An immediate charitable income tax deduction in the year you make the gift.
• Avoiding capital gains taxes at the time of the transfer.
• The opportunity to live in your home or use the property for the rest of your life.
• Knowing that the property will be excluded from any estate and inheritance taxes.

Because each property and gift plan is unique, any real estate gift will require careful consideration by your legal and tax advisers. They can explain how advantageous a real estate gift can be.

There are several forms a gift of real estate can take:

An outright gift
The simplest of these is to make an outright gift. For an outright gift of real estate to occur, a deed is drawn up that transfers your property to Chosen People Ministries. Chosen People Ministries credits you with a gift equal to the fair market value of the real estate. You are eligible for a charitable income tax deduction for the property’s market value and you avoid any capital gains tax for which you might have been liable had you sold the property. You may donate an entire piece of real estate, or just a portion of it. You may also make the gift in stages. This last approach is often helpful from a tax planning perspective.

A part gift/part sale
The part gift/part sale type of real estate gift is also known as a “bargain sale” because it involves your selling property to Chosen People Ministries at a bargain price. You transfer property to Chosen People Ministries and, in exchange, Chosen People Ministries pays you an amount of money which is less than the property’s market value. The difference between the fair market value and what Chosen People Ministries pays you is considered a gift. You are eligible for a tax deduction and you avoid any capital gains tax on the portion of the transaction that is considered a gift.

A gift with a retained right to income
You can donate your property to Chosen People Ministries and, in exchange, Chosen People Ministries agrees to make annual income payments to you for the rest of your life and to a survivor beneficiary for his or her life. The amount of income you receive depends on the value of the property you donate and the ages of the income beneficiaries. For this type of gift you receive a tax deduction on a portion of the market value of the real estate and generally avoid the capital gains tax. Many people use life income gifts to convert a non-income producing asset, such as real estate, to one that produces an income stream.

A gift with a retained right to live in the donated property
You can transfer your home to Chosen People Ministries and specify in the deed that you are retaining the right to live in the house for the rest of your life or until you decide to leave it. You and Chosen People Ministries sign an agreement which spells out each party’s responsibility with regard to the property. The donor usually continues to be responsible for all expenses except major repairs. At the time you transfer the property to Chosen People Ministries, you receive a tax deduction for a portion of the market value of the property

A gift through your will
You can designate this gift as a specific bequest in your will. On your death, the real estate will be transferred to Chosen People Ministries, or in some instances the estate will sell the property and transfer the proceeds from the sale to Chosen People Ministries. Your estate will receive a charitable tax deduction for the value of the real estate at the time of your death. The language to accomplish this through your will is simple:

I/we give the property at ______________ (insert address or brief description of the property you wish to donate) to Chosen People Ministries, a not-for-profit corporation, incorporated in the Province of Ontario.

Chosen People Ministries’ life income plans provide you with a variety of opportunities to help bring the Gospel to Jewish people while receiving payments for life and valuable tax savings. Chosen People Ministries offers a choice of life income plans which can provide you with fixed or variable payments.

The theory of such a gift is simple. You make an irrevocable contribution of cash or securities valued at $10,000 or more and, in return, receive payments for life or a term of years. After your death the remaining principal will pass to Chosen People Ministries to be used as you have instructed.

Appreciated securities are an excellent way of funding these gifts, often unlocking greater income while eliminating, or at least reducing, capital gains tax.

Why Should You Make a Life Income Gift?
By making a life income gift to Chosen People Ministries, you can have the satisfaction of making a gift now without losing the income from the asset you donate. In addition, you:

• will receive an immediate charitable income tax deduction
• will avoid the capital gains tax on transferring appreciated assets
• will have your assets managed by a professional at no cost to you
• can provide an assured income to a loved one for his or her lifetime
• may actually increase your own income and enhance your retirement plan
• may be able to reduce your estate taxes
• may be able to make a larger gift to Chosen People Ministries than would otherwise have been possible
• may provide a hedge against inflation with a plan that allows your payments to fluctuate

What is a Life Income Gift?
There are a number of different life income gift types. While each has its own special features, a basic concept applies to all – you make a gift to Chosen People Ministries but continue to receive the income from what you donate.

When you make the gift, you decide whom you would like to receive the income payments (the beneficiary). It can be you, you and your spouse or another relative or friend. Income will be paid to the beneficiaries for their lifetimes, or you can specify a fixed number of years. On the death of the last beneficiary, your gift becomes available to Chosen People Ministries to use where it is most needed or as specified by you at the time you make your gift.

Some types of life income arrangements available through Chosen People Ministries are:

Chosen People Ministries Gift Annuity
A Chosen People Ministries Gift Annuity is a contract between you and Chosen People Ministries. You transfer cash, stocks, bonds, or real property to Chosen People Ministries and receive guaranteed payments for the rest of your life. The amount of each payment is determined by your age at the time the annuity is initially funded. These payments will never change. Payments can begin immediately or be deferred until the future to supplement a retirement plan. You receive an immediate charitable income tax deduction for the gift portion of the annuity and part of each payment is a tax-free return of principal

Charitable Trusts
By setting up a Trust, you can give to Chosen People Ministries and provide for your family at the same time. A trust can provide for your children, grandchildren or other relatives, with the remainder divided by any number of charities; or a trust can provide for charity for a number of years or a lifetime, and then go to any number of heirs or beneficiaries.

Which Asset is Best for a Life Income Gift?
While almost any asset may be used to fund a life income gift, the best is a highly appreciated, low-yielding asset. By donating an appreciated asset, you avoid paying the capital gains tax for which you would be liable if you were to sell the asset.

By using real estate to fund a gift, you may be able to make a gift to Chosen People Ministries of a size which would otherwise not have been possible. Whether it is a house, farm, vacation home, office building or plot of undeveloped land, your property can be a very helpful gift for you and for Chosen People Ministries.

A real estate gift can provide you with a combination of advantages and tax savings. Some of the benefits of a real estate gift accepted by Chosen People Ministries include:

• An immediate charitable income tax deduction in the year you make the gift.
• Avoiding capital gains taxes at the time of the transfer.
• The opportunity to live in your home or use the property for the rest of your life.
• Knowing that the property will be excluded from any estate and inheritance taxes.

Because each property and gift plan is unique, any real estate gift will require careful consideration by your legal and tax advisers. They can explain how advantageous a real estate gift can be.

There are several forms a gift of real estate can take:

An outright gift
The simplest of these is to make an outright gift. For an outright gift of real estate to occur, a deed is drawn up that transfers your property to Chosen People Ministries. Chosen People Ministries credits you with a gift equal to the fair market value of the real estate. You are eligible for a charitable income tax deduction for the property’s market value and you avoid any capital gains tax for which you might have been liable had you sold the property. You may donate an entire piece of real estate, or just a portion of it. You may also make the gift in stages. This last approach is often helpful from a tax planning perspective.

A part gift/part sale
The part gift/part sale type of real estate gift is also known as a “bargain sale” because it involves your selling property to Chosen People Ministries at a bargain price. You transfer property to Chosen People Ministries and, in exchange, Chosen People Ministries pays you an amount of money which is less than the property’s market value. The difference between the fair market value and what Chosen People Ministries pays you is considered a gift. You are eligible for a tax deduction and you avoid any capital gains tax on the portion of the transaction that is considered a gift.

A gift with a retained right to income
You can donate your property to Chosen People Ministries and, in exchange, Chosen People Ministries agrees to make annual income payments to you for the rest of your life and to a survivor beneficiary for his or her life. The amount of income you receive depends on the value of the property you donate and the ages of the income beneficiaries. For this type of gift you receive a tax deduction on a portion of the market value of the real estate and generally avoid the capital gains tax. Many people use life income gifts to convert a non-income producing asset, such as real estate, to one that produces an income stream.

A gift with a retained right to live in the donated property
You can transfer your home to Chosen People Ministries and specify in the deed that you are retaining the right to live in the house for the rest of your life or until you decide to leave it. You and Chosen People Ministries sign an agreement which spells out each party’s responsibility with regard to the property. The donor usually continues to be responsible for all expenses except major repairs. At the time you transfer the property to Chosen People Ministries, you receive a tax deduction for a portion of the market value of the property

A gift through your will
You can designate this gift as a specific bequest in your will. On your death, the real estate will be transferred to Chosen People Ministries, or in some instances, the estate will sell the property and transfer the proceeds from the sale to Chosen People Ministries. Your estate will receive a charitable tax deduction for the value of the real estate at the time of your death. The language to accomplish this through your will is simple:

I/we give the property at ______________ (insert address or brief description of the property you wish to donate) to Chosen People Ministries, a not-for-profit corporation, incorporated in the province of Ontario.