Gifts of Opportunity
Victoria College alumni have many reasons for supporting their alma mater through a bequest in their Will, such as creating opportunity through estate, legacy and gift planning. “Through their bequest, they recognize the impact Vic had on their lives—and pay it forward by helping to ensure that future students have the same opportunity,” says Sharon Gregory, Vic’s associate director of gift planning.
Retired tax lawyer Julie Y. Lee Vic 7T1 agrees. Since 2017 Lee has been a member of Victoria University’s Heritage Society, which recognizes those who have made a provision for Victoria College or Emmanuel College through a bequest in their Will or other form of planned gift.
“My university education set me on a path toward a fulfilling life and a successful law career and I’m so grateful for the financial support I received throughout my undergraduate years,” says Lee. “I have arranged a legacy gift to Vic in my Will, not only as an expression of gratitude, but also because I want to secure that same experience for future students.”
Victoria University can be designated as a beneficiary in your Will. Since the gift is deferred, there are no immediate income tax benefits associated with a bequest; however, this type of gift is eligible for a tax receipt which may be applied to up to 100% of the income (including all assets that are deemed as disposed of) stated on your final return. The receipt may also be carried back and claimed in the year previous to death.
Your bequest to Victoria may be one, or a combination, of the following:
- A percentage of your estate
- The residual of the estate
- A specific dollar amount
- Real estate
- Stocks and securities
- Gifts-in-kind (art, rare books, etc.) of value and/or use to the purposes of the University
- Insurance policies and annuities (Victoria alumni are eligible to purchase annuities through the United Church of Canada.)
The drafting of a Will should be arranged with the involvement of legal council. It is preferable that you allow for the broadest possible flexibility for determining how your gift should be used by Victoria University while at the same time ensuring that the university can carry out your wishes.
Here is an example of suggested wording:
I give and bequeath to the Board of Regents of Victoria University, Toronto, Ontario, the sum of $________ or ______% of my estate.
Charitable gift annuities provide support for the university and a secured income stream for your lifetime. Depending on your age, this income can be tax free. An annuity is an agreement where you make an irrevocable payment in return for a guaranteed lifetime income, most or all of which is non-taxable.
For alumni and friends of Victoria College and Emmanuel College, two choices exist for the purchase of annuities:
Commercial Charitable Gift Annuities
Part of your total contribution is used to purchase an annuity from a licensed insurance company. You receive fixed guaranteed payments for life with a portion of this income tax-free depending on your age, and Victoria College or Emmanuel College receives an immediate cash gift for its current needs. Gift annuities may also be purchased for others, such as parents or grandparents.
United Church of Canada
A gift annuity purchased through the United Church of Canada returns income to you, most or all of which is tax-free. The annuity is designed so that, following your death, a residue of 50% is directed to Victoria University. The exact amount of the gift depends on how long you live and future interest rates and inflation.
In both scenarios, probate costs associated with a charitable bequest are avoided and your gift can be designated to a priority at Victoria University that meets your interests.
Charitable Remainder Trusts
Long popular in the United States, charitable remainder trusts are growing in use in Canada as a way for donors to make a sizeable commitment while maintaining the use of their assets for the duration of their life or the term of the trust. Assets placed in the trust can include: cash, stocks, bond, securities and other investments.
If you establish a charitable remainder trust, you will receive a tax receipt for the present value of your assets calculated using life expectancy and prevailing discount rates at the time the trust is established.
By establishing a charitable remainder trust, you will:
- receive a charitable tax receipt at the time the trust is established;
- be able to carry the excess tax credit forward for up to five years if your gift exceeds 75% of your net income in the year that the gift is made;
- receive lifetime income from your donation;
- avoid probate and maintain the privacy of the details of your gift.
Gifts of Residual Interest
With a gift of residual interest, you can donate your personal property, continue to use it and receive an immediate tax receipt. Your gift of residual interest can benefit Victoria University in one of two ways:
- The property, following your death, will enhance Victoria’s collections.
- Proceeds of your gift of residual interest can be used to support the university.
The assets placed in trust are typically property such as a principal residence, art work, or book collection. A fair market value for the property is determined at the time of the gift. The donor’s age is taken into account and an appropriate discount rate is used to determine the tax receipt issued. You continue to enjoy the use of your property until the end of the term of the trust.
For more information on gift planning vehicles including bequests, gifts of charitable annuities, charitable remainder trusts and residual interest, please contact:
Associate Director, Gift Planning
73 Queen's Park Crescent, Toronto, Ontario
416-813-4050 or 1-888-262-9775.