Planned Giving

Since 1991, the Cape Breton Regional Hospital Foundation has raised more than $50,000,000 for healthcare in Cape Breton.

Since our beginning, 36 individuals  have left more than $6,200,000 to the Cape Breton Regional Hospital Foundation through their estates. In the past year alone, we have received several gifts of estate and have had life insurance policies donated as well. We invite you to join the growing number of donors who have used legacy gifts to strengthen healthcare in Cape Breton.

An image

Most commonly used planned gifts

Bequests

A charitable bequest is one of the simplest and most common types of planned gifts. There are many benefits to you by making a bequest to the Cape Breton Regional Hospital Foundation in your will:

1. By stipulating your wishes in a will, you control what happens to your Estate. If you do not have a will, provincial law dictates what happens to your Estate.

2. With a will, you know that your loved ones and causes close to your heart will be taken care of according to your wishes.

3. A tax receipt will be issued for the full amount of the bequest, reducing the amount of tax that must be paid on your Estate.

Specific Bequest: is a gift of a particular piece of property (for example, art or shares in a company) or a stated sum of money. The advantage of making a specific gift is it can be precisely identified and is simple to administer.

Residuary Bequest: is a gift of all or a fraction of whatever remains (the residue) after all debts, taxes, administrative expenses, and specific bequests have been paid. The actual value is sensitive to any changes in the value of an estate.

Contingent Bequest: takes effect only if the primary intention cannot be met (for example, if the primary beneficiary does not survive the donor). In any of the three types of bequests listed above, you may also decide how you would like your gift to the Cape Breton Regional Hospital Foundation be directed.

Taxation for Estate Gifts (Bequests)

When you include a gift in your will to a charity, your estate is entitled to a charitable tax receipt for the full value of the bequest. The resulting tax credit may be claimed against 100 per cent of net income in your final lifetime return. Excess credits may be claimed against 100 per cent of net income in the year prior to death. This can significantly reduce the income tax payable by your estate.

New rules as of January 1, 2016 provide even more flexibility in claiming the tax credit, including up to five years after the year of death. Your legal advisor can provide you with details on how these rules will affect your estate planning.

EXAMPLE:

In his will, Cecil, a widower, leaves $100,000 to the Cape Breton Regional Hospital Foundation and the remainder of his estate to his two children. Assuming the net income on his final income tax return is large enough for the entire bequest to be claimed for a charitable tax credit, the bequest may result in a combined federal and provincial tax savings of approximately $50,000. If he had left the $100,000 to his children, income tax could have consumed that part of it, leaving them with $50,000.

You should consider giving your personal representative (executor) the discretion to choose the particular assets that fulfill the charitable bequest. For example, if your executor is authorized to select publicly-listed securities to pay the charitable bequest, none of the gain in the securities will be subject to income tax.

Many individuals gain peace of mind and satisfaction in knowing they have provided, not only for their immediate families, but for the charitable organizations that enriched their lives and those of others.

Sample Clauses for Wills:

A donor may want to designate a gift under their will to be used for a specific purpose. In this case it would be appreciated if the donor includes a “power to vary” clause in the will.

Such a clause would allow the Cape Breton Regional Hospital Foundation to use the funds for other purposes in case it is no longer feasible to use the funds for designated purposes.

 

Specific Bequest, Unrestricted

I give to the Cape Breton Regional Hospital Foundation the sum of $_____________________

-Or-

I give to the Cape Breton Regional Hospital Foundation the sum of $________ to be applied by the Directors for such purposes as the Directors may deem appropriate

-Or-

I give to the Cape Breton Regional Hospital Foundation the sum of $____________ without imposing any restrictions upon the request

Specific Bequest, Restricted

I give to the Cape Breton Regional Hospital Foundation the sum of $_______ to be used for _____________.

(This type of bequest should include the “power to vary”)

Power to Vary:

If, at any point in time, the _______________ no longer takes place within the Cape Breton Regional Hospital, the Directors of the Cape Breton Regional Hospital Foundation reserve the power to redirect said funds to the area of greatest need, keeping in mind the original intent of the donor.

 

A donor may want to designate a gift under their will to be used for a specific purpose. In this case it would be appreciated if the donor includes a “power to vary” clause in the will.

Such a clause would allow the Cape Breton Regional Hospital Foundation to use the funds for other purposes in case it is no longer feasible to use the funds for designated purposes.

Residual Bequest

I give to the Cape Breton Regional Hospital Foundation all (or a stated percentage) of the residue of my estate for use as the Foundation may deem appropriate.

-Or-

I give to the Cape Breton Regional Hospital Foundation all (or a stated percentage) of the residue of my estate to be used for ________________.

(This type of bequest should include the “Power to vary”)

Contingent Bequest

If (name of primary beneficiary/ies)do/es not survive me, or shall die within thirty days from the date after my death, I give to the Cape Breton Regional Hospital Foundation __________ (describe amount, or percentage of residual estate). A contingent bequest can also be stated as a specific bequest.

(This type of bequest should include the “Power to vary”)

Power to Vary:

If, at any point in time, the _______________ no longer takes place within the Cape Breton Regional Hospital, the Directors of the Cape Breton Regional Hospital Foundation reserve the power to redirect said funds to the area of greatest need, keeping in mind the original intent of the donor.

 

Life Insurance

Life Insurance is a simple way to make a gift. With a modest donation of monthly insurance premiums, you will be able to leave a large and lasting legacy to the Cape Breton Regional Hospital Foundation.

In addition to the tax benefits, either present or deferred, a gift of life insurance is not subject to probate fees; it is not a matter of public record and cannot be contested as in the case of gifts in wills.

As with all gifts made to the Cape Breton Regional Hospital Foundation, you may stipulate how the funds will be used.

There are a number of options available to you as to how to use life insurance to support the Regional Hospital:

1. You can name the Cape Breton Regional Hospital Foundation as the beneficiary of a new or existing policy and your estate would receive a tax receipt for the full value of the death benefit.

2. You can transfer ownership of a new or existing policy to the Cape Breton Regional Hospital Foundation. With this option you will receive tax receipts for the premium payments as well as the cash value of the policy. This would be considered to be an irrevocable gift.

Taxation for Gifts of Life Insurance

For the purchase of a new policy that is gifted irrevocably to the Foundation, consider the following example.  Mary, aged 46, has discretionary income but cannot afford to make a capital contribution to the Cape Breton Regional Hospital Foundation. She purchases a life insurance policy with a face value of $50,000, names the charity as owner and beneficiary and pays annual premiums of $1,600 for approximately five years. Each year she receives a donation receipt for the premiums paid. Her tax credit is approximately $720 (45%). Her out of pocket cost to make a future gift of $50,000 is only $880 per year.

It is also possible for an individual to gift an existing life insurance policy to a charity. The amount of the policy’s cash surrender value (if any) will qualify as a charitable donation, but the gift will constitute a disposition for income tax purposes. This will result in taxable income to the donor to the extent that the cash surrender value exceeds the policy’s adjusted cost base. Any taxable income generated will partially or fully offset the immediate tax savings from the gift. However, tax credits would continue to be available on the payment of future premiums.

Consider the example of Bill who owns a universal life policy with a cash surrender value of $50,000 and adjusted cost base of $40,000. On the transfer of the policy to the Cape Breton Regional Hospital Foundation, Bill would realize income of $10,000 and, assuming a marginal tax rate of 45%, tax of $4,500 would result. However, he would also receive credit for a charitable donation of $50,000, giving him tax savings of approximately $22, 500. Net tax savings to Bill from gifting the insurance policy would amount to $18,000. Bill would also get a tax receipt for future premiums paid on behalf of the Foundation under the policy.

Other types of Planned Gifts

Gifts of Securities

The Cape Breton Regional Hospital Foundation welcomes gifts of publicly traded securities.  The federal government has created special incentives to encourage such gifts by eliminating the capital gains tax on gifts of publicly traded shares to public charities. 

There are a variety of Publicly Traded Securities which could be potential gifts:

  1. Shares, debt obligations or rights listed on prescribed stock exchanges across Canada as well as many foreign stock exchanges;
  2. Shares of capital stock of a mutual fund corporation;
  3. Units of a mutual fund trust, interests in related segregated fund trusts (a mutual fund relating to an insurance policy)                   
  4. A prescribed debt obligation.

Gifts of Securities procedure:

1.  The donor contacts the Foundation to express an interest in giving a gift of stock.  The Foundation determines the intent of the gift along with the relevant information for issuing a tax receipt. 

2.  The Foundation contacts BMO Investment Services with the particulars of the proposed gift.

3. The donor is contacted by Andrea Ross, Investment Representative, BMO.

Her number is 902-867-5620An imageAn imageAn imageAn imageAn imageAn imageAn imageAn imageAn imageAn image.

4. The donor/donor’s brokerage firm forwards the stock certificate or electronic information to BMO and the value of the gift is determined.  The following account info should be used:

Account # 250-14664-17

Receiving Address:

BMO Nesbitt Burns

Purdy’s Wharf Tower II

1969 Upper water Street, Suite 1901

Halifax, NS B3J 3R7

DTC – 5043

CUID – NTDT

5. On receipt of the shares, they will be sold; verification is then given to the Foundation from BMO by fax, email or phone concerning the amount of the tax receipt.

Taxation for Gifts of Stock / Publicly Traded Securities

Joe donates publicly listed stock valued at $50,000 that he purchased years ago for $10,000. His capital gain is $40,000, but because he is donating them directly, none of the gain is taxable. His contribution results in a tax credit of $25,000. Joe has saved the tax on the gain of his stock and his $50,000 gift has cost him only $25,000 (assuming a 50 per cent rate).

Suppose Joe had sold the stock instead of contributing it. The taxable portion of the gain would have been $20,000 (50% x $40,000), and the tax on this gain would have been $10,000 (50% x $20,000). His after-tax sale proceeds would have been $40,000.

Registered Plans

The Cape Breton Regional Hospital Foundation can be named the beneficiary of an RRSP or RRIF. There are many advantages to directing RRSP or RRIF as a charitable donation to the Cape Breton Regional Hospital:

Current tax rules state, in the year of death, donations of up to 100% of the taxable income are deductible on the final tax return, with an unused portion allowed to be carried back to the previous year.

  • At the time of your death, unless there is a surviving spouse to receive the RRSP or RRIF, all money invested in an RRSP or RRIF must be declared as income. This means that a large percentage of your estate would be paid out in taxes. By designating some or all of your RRSP or RRIF to the Cape Breton Regional Hospital Foundation, your estate would receive a charitable tax receipt helping to offset the amount of tax to be paid.
  • The proceeds from the RRSP or the RRIF would be paid directly to the Cape Breton Regional Hospital Foundation without going through probate, thus saving on probate fees.
  • As a donor, you know your gift will be helping sick people in Cape Breton. You will be leaving a lasting legacy to our community and will be able to help patients at the Regional Hospital for many years to come.

Charitble Annuities

A charitable gift annuity can benefit both you and the Cape Breton Regional Hospital.  Depending on your age, a charitable annuity allows you to save tax, enjoy a guaranteed income for life and give a gift today.  This type of gift might be appealing if you:

  • Are over the age of 65
  • Have accumulated wealth and do not need this portion of your capital to leave for your surviving spouse or heirs
  • Are concerned about the amount of tax you pay on your interest-bearing investments
  • Wish to increase your after-tax disposable income
  • Like the security of fixed, guaranteed income
  • Would like worry-free management of your investments

Charitble Trusts

A charitable remainder trust is a unique way to make a significant gift to the Cape Breton Regional Hospital Foundation, receive immediate tax benefits and maintain your level of income. With a charitable remainder trust, you transfer your assets to a trust making and irrevocable gift of the entire capital or remainder interest to the Cape Breton Regional Hospital Foundation.

For a donor there are a number of benefits for using this vehicle to make a planned gift:

  • You will maintain or in some instance increase your level of annual income.
  • You will receive a tax receipt for the net present day value of the remainder trust that has immediate tax benefits.
  • You will be recognized by the Cape Breton Regional Hospital Foundation for your gift based on the full value of the trust when the trust is established.

The two most common types of trusts are:

1) Charitable Trust Remainder

Establishing a charitable remainder trust would be of interest to a number of different types of people.

For example, a retired couple or an individual who would like to support the Cape Breton Regional Hospital Foundation but has a significant portion of their wealth in highly appreciated but low income producing assets. By transferring the assets to a charitable remainder trust, they could increase their income, help the Regional Hospital and receive a charitable tax receipt.

 Certain conditions must be met in order for a gift to qualify as a charitable remainder trust:

  • The transfer of assets to the charitable remainder trust must be irrevocable.
  • The property must reside with the Cape Breton Regional Hospital Foundation at the time of the transfer.
  • The value of the residual interest given to the Foundation must be ascertainable.
  • The principle of the interest cannot be encroached upon; therefore any administrative fees associated with the management of the trust must be deducted from the income paid.

2) Gifts of Residual Interest

Gifts of residual interest refer to an arrangement under which property, such as a home or artwork, is irrevocably deeded to the Cape Breton Regional Hospital Foundation.  Once the asset has been irrevocably transferred to the Cape Breton Regional Hospital Foundation, you are entitled to a tax receipt for the present value of the residual interest.  This tax receipt is based on a Canada Revenue Agency formula.  You then retain the use of the property for your lifetime or for a predetermined period.  The Cape Breton Regional Hospital Foundation is free to make use of the property or sell it after the specified time period or after you pass away.

This type of gift may appeal to you if you:

  • Are over age 65
  • Wish to give us a gift through a Will bequest, but would like the tax advantages now
  • Do not want to change your standard of living but would like to make a substantial gift now.

Endowments

An endowment fund is like a charitable investment fund, where a donation is permanently invested and the income earned each year is used to support the Cape Breton Regional Hospital Foundation. 

Endowments may be created with a minimum donation of $10,000, by either a one-time donation or a pledged donation over time.  All new endowments must be approved by the Investment Committee.

The Cape Breton Regional Hospital Foundation manages endowment funds for a variety of donors and purposes. An endowment may be established to support a specific area of care, program, research, etc. In order to ensure that endowment funds meet funding objectives for current programs as well as those in the future, the Foundation abides by an Investment Policy Statement that is managed by a professional portfolio manager and the Board appointed Investment Committee. 

Endowments can also be made to the General Endowment Fund, which has a current portfolio value of $6.85M.

The Cape Breton Regional Hospital Foundation’s Investment Committee will establish an annual spending allocation and growth target.  The payout and recapitalization is recommended to be 4% to 5% and 1% respectively.

As part of your legacy, a named endowment is a deeply personal statement of who you are (or the impact a loved one has had on your life), and what you believe should be supported long into the future.

Other Information

Specified Funds & Endowments

The amount of the donation to establish a specified fund is $10,000. There is an option to start the fund with a lesser amount, however it is not preferred.

In order to establish a Specified Fund, Terms of Reference must be drafted and must include:

  • The background of how and why the Fund is established.
  • The purpose of the Fund. Including parameters on spending the funds.
  • Signing Authorities.
  • Power to vary clause

Receipting

A customized acknowledgement letter will be prepared by the Cape Breton Regional Hospital Foundation and sent immediately upon receipt of the gift.

Taxation

A donor can claim a tax credit on the eligible amount of the gift to the Cape Breton Regional Hospital Foundation.

The Cape Breton Regional Hospital Foundation Charitable Registration Number is: 130404593RR0001

For more information on tax related questions, please visit: www.cra.gc.ca and select Charitable Donations and Gifts, or speak to your financial planner/accountant.

Charitable Tax Credit for Cash Donations

When you make a charitable gift you receive a combined federal and provincial tax credit.  The amount of credit is applied directly to the amount of income tax you owe.  Cumulative yearly gifts over $200 earn a combined tax credit of approximately 50%, depending upon the province in which you live. 

If Sally Smith writes a cheque for $1,000 to the Cape Breton Regional Hospital Foundation, the net cost of the gift is only $500 as her donation receipt for $1,000 provides a tax credit of $500.

If you were to apply the same logic and taxation strategy to a cash donation of $10,000 to create a named endowment for a loved one, the cost of the donation would be $5,000 after the tax credit is applied.

Probate Court

Although the Cape Breton Regional Hospital Foundation is always invited to attend Probate Court when named as a beneficiary under a will, as a rule we do not attend the hearings except in such circumstances:

  • We are the sole beneficiaries of the will or the sole residual beneficiary
  • Expenses have been called into question
  • Estate has been contested
  • Advised by legal council

In the case of a straight bequest the executors and lawyers for the Estate have usually established themselves throughout the Administrations process as acting in the best interests of the Cape Breton Regional Hospital Foundation and therefore our appearance at Probate Court is not necessary.

Planned Giving Guidelines

Objective:

The objective of these guidelines is to protect the donor and to encourage planned gifts to the Cape Breton Regional Hospital Foundation.  This document is to be used as a guideline to simplify the administration of planned gifts in a way that protects both the donor and the Cape Breton Regional Hospital Foundation.
Prospective donors should be encouraged to discuss their proposed gift(s) with independent legal and/or tax advisors of the donor’s choice so as to protect them and ensure that they receive a full and accurate explanation of all aspects of the proposed charitable gift.

Discussion with the donor’s family members should, when appropriate, be encouraged to ensure that they are aware of the proposed gift to the Cape Breton Regional Hospital Foundation.

Rationale:

The rationale for these guidelines is to define the authority of the planned giving staff at the Cape Breton Regional Hospital Foundation and to establish the parameters under which the staff operates.

The CEO of the Cape Breton Regional Hospital Foundation is authorized to negotiate planned gift agreements with prospective donors, following guidelines approved by the Board of Directors of the Cape Breton Regional Hospital Foundation.

The CEO of the Cape Breton Regional Hospital Foundation must provide prospective donors with accurate information concerning the use of their proposed gift by the Regional Hospital, at all times representing the hospital in an ethical manner.

Prospective donors should be encouraged to discuss their proposed gift(s) with independent legal and/or tax advisors of the donor’s choice so as to protect them and ensure that they receive a full and accurate explanation of all aspects of the proposed charitable gift.

Discussion with the donor’s family members should, when appropriate, be encouraged to ensure that they are aware of the proposed gift to the Cape Breton Regional Hospital Foundation. 

Standard of Ethics

It is an expectation that all staff soliciting and/or stewarding planned gifts will adhere to the ethical fundraising practices and behavior as set forth in the AFP Donor Bill of Rights.

Solicitation and Cultivation of Planned Gifts

Strategic direction for the solicitation and cultivation of planned gifts is the responsibility of the CEO, and Board of Directors of the Cape Breton Regional Hospital Foundation.

Signing Authorities

The CEO of the Cape Breton Regional Hospital Foundation has the authority to sign the documentation pertaining to the various types of planned gifts unless the signature of a member of the Board of Directors is specifically requested by the donor. When a second signature is required from a Board Member, the Board Treasurer or Board Chair have the authority to sign.

 

Building A Foundation: A new Horizon for Health Care in Cape Breton
  Cape Breton has invested a lot in healthcare over the past thirty years. In fact more than $50,000,000 has been donated by our...


Building A Foundation: A new Horizon for Health Care in Cape Breton
Cape Breton has invested a lot in healthcare over the past thirty years. In fact more than $50,000,000 has been donated by our community in the...



@BecauseUCare This holiday, If you want a card, indicating what you’ve funded, you can pick one up outside of the Foundation Offi… https://t.co/8msBjP56ZW