Remainder Trusts

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A charitable remainder trust is an arrangement between three parties: the benefactor, a registered charity and a financial institution. The benefactor makes an immediate and irrevocable donation to the charity.

The charity in return agrees to:

  1. place the donated amount in a trust held by the financial institution;

  2. issue an official receipt for income tax purposes for the amount that, if invested today, would grow to the size of the donation at the date that the donor reaches his or her normal life expectancy (the older you are, the larger the amount of the receipt); and

  3. direct the financial institution to pay at regular intervals the net income from the trust to the donor for life.

Upon the donor's death, the charity becomes the beneficiary of the assets in the trust. This kind of gift is a good way for the benefactor to be assured that his or her generosity will eventually help charitable causes, while at the same time being guaranteed for life the income generated by the donated amount.

Note that this type of donation is not part of one's last will and testament, therefore it is protected from the claims of creditors and from persons who wish to contest the will. In addition, it is not subject to probate fees.

It should also be noted that unlike an annuity, the income payments from a charitable remainder trust may vary from year to year, depending on whether interest rates have gone up or down.

You could select the financial institution of your choice, but if you prefer we would be delighted to have an agent from a reputable company explain to you all the different aspects and benefits of such a plan, in which case we would need to know your age and the amount involved.
 

Note: Information on this page is not intended as specific financial planning or legal advice. We encourage you to consult your lawyer or financial advisor should you consider making such an important gift.


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The Call of the Poor
P.O. Box 117
St. Norbert, Manitoba
R3V 1L5
(204) 275-1432