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Charitable Remainder Trusts are powerful planning tools for people who are 70 years of age or older who have made, or who are planning to make, a charitable bequest. A charitable remainder trust is a life income gift that enables you to give today and create immediate tax savings, yet retain the income from the donated asset. After a prescribed period of time or upon your death, the asset is transferred to one or more charities.
In essence, you irrevocably transfer a property (such as investments, real estate, work of art, etc.) into a trust to be managed by a trustee (a financial institution, yourself, a lawyer or other individuals) and name the ALS Society of Ontario as the remainder beneficiary in trust, and reserve an interest in the property for life. The remainder interest in the property transfers to the ALS Society of Ontario.
A trust document names the interest income beneficiary (you, you and your spouse, etc.) You receive a tax receipt based on the net present value of the remainder interest.
The result of this planned gift is that you can continue receiving income or using the property during your life.
The immediate tax deduction available to you depends on the value of the property, your age, beneficiary and other beneficiaries, and the period of time that the income interest will exist.
The tax receipt value of your remainder trust may eliminate all income taxes in the year the gift was made as well as in the following five years.