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Trusts/Residual Interest

If donors have assets that they would consider giving to the Greater Saskatoon Catholic Schools Foundation Inc. but they want to maintain control over them, need the income they generate, or wish to retain the use of them for their lifetime, a trust arrangement may provide a solution.

Many donors wish to retain a lifetime interest for themselves, or a close relative, in financial assets or property. By establishing a charitable remainder trust, the gift can be structured so the donor is able to use the assets or property and receive a tax receipt while simultaneously providing the Foundation with a substantial gift upon the donor's death. Upon death, the earnings from the trust's assets, or the entrusted capital, will be used as designated by the donor.

Charitable Remainder Trusts

With this type of planned gift a donor creates a trust funded with securities, real estate or cash, making a irrevocable gift of the remainder interest to the Greater Saskatoon Catholic School Foundation Inc. The donor retains the income for the rest of his/her life or for a guaranteed number of years. At no time can the principal of the trust be decreased. This type of arrangement offers the donor a number of benefits:

• A charitable donation tax receipt for the present value of the remainder interest.
• If the donor chooses, he/she is free of any management responsibility for the Trust.
• The gift is not subject to probate.

Residual Interest in Property

A donor may choose to donate specific items of property such as real estate, artwork, etc., which will pass to the Foundation at a future time. This type of arrangement allows the donor to make a gift (usually artwork or real estate) and continue to either reside in or keep it in their possession until their death.

This type of gift requires that the property be irrevocably transferred to the Greater Saskatoon Catholic Schools Foundation Inc. The donor is then entitled to a charitable tax receipt for the present value of the residual interest owned by the Foundation. The value of this receipt will not be as large as it would be if this were an outright gift of property to the Foundation, but the donor retains the right to use the property as if it were theirs until their death. The present value of the property is actuarially calculated according to the regulations set out by Revenue Canada. It takes into account the fair market value of the property, the life expectancy of the donor retaining a life interest in the property and the current interest rates. An Accountant or Actuary is usually asked to make this calculation.

This type of gift benefits both the donor and the charity:

• The donor realizes an immediate tax benefit.
• The donor continues to have use of the property.
• The donor has the satisfaction of knowing the gift will eventually help the Greater Saskatoon Catholic Schools Foundation Inc.
• The Foundation knows it can count on this future gift.

We would be pleased to discuss the particulars of a certain situation to examine the possibility of creating a trust arrangement.

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