Paul B. St. Louis, LL.B, TEP Vice- President, Doherty & Associates Ltd., Investment Counsel began his professional career as a practising lawyer and subsequently spent the next 15 years in private wealth management with two of Canada’s largest financial institutions specializing in estate planning, estate settlement and fiduciary management.
“Forever CHEO is important to me because we are incredibly lucky to have CHEO serving our community. It is so easy to be inspired by the commitment to health care and compassion that every staff member has at CHEO, particularly when the situation becomes more serious. It is a privilege to help out in some way to encourage charitable support for such a worthy community institution.”
PLANNING A LEGACY GIFT AS PART OF YOUR ESTATE PLAN CAN HAVE POSITIVE TAX BENEFITS
Did you know that you can designate a charitable organization as the direct beneficiary of a part or all of your retirement funds?
Many people who have been faithfully putting away funds regularly into registered retirement savings plans are only peripherally aware of the large embedded
tax liability within these funds. For those holding such plans, the general idea is to draw on these funds later in life (you must begin doing so in the year following the year in which you turn 71) when your taxation rate may be lower. When the funds come out of the plan, they are considered income and taxed accordingly. Similarly on death, unless rolled over to a qualified beneficiary (usually a spouse), the funds are de-registered all at once, considered
income and consequently taxed heavily.
Did you know that you can designate a charitable organization as the direct beneficiary of a part or all of your retirement funds? This represents a unique opportunity for some donors who are planning a legacy gift as part of their estate plan. When CHEO is designated as a direct beneficiary of a part or all of your RRSP or RRIF, on the death of the plan holder, your estate can be issued a charitable tax receipt for the full amount of the designated funds which will generally offset the entire tax liability embedded in the designated funds. It is relatively straightforward to make this kind of gift. You simply need to name the hospital (CHEO Foundation – charitable registration number 11885 2474 RR0001) as the beneficiary on the plan documentation with the financial institution that holds your retirement account.
Before moving forward with such a gift, you need to consider this technique in the broader context of your overall financial and tax situation, so it is advisable to get professional advice from either your own financial planner or one of CHEO’s Legacy Advisory Committee members.
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