Bequests

Helping to Secure Conestoga’s Vision for Tomorrow

Few legal instruments are more important to the people and causes you care about than your Will. Through a bequest, you can also have a direct impact on the future of Conestoga's academic excellence and create a legacy that will live on for future generations. To make a gift to Conestoga from your estate, you must draft a new Will or add a codicil to your present Will. A bequest may be large or small, restricted or unrestricted. It can include cash, securities, real estate, other property, or a percentage of the residue of your estate. To ensure that your wishes are honoured, a bequest should be prepared in consultation with your lawyer and discussed with the Development Office at Conestoga.

Advantages of Bequests

• A bequest allows you to make a substantial gift in the future without diminishing your assets today. In other words, it costs nothing now, yet it may give you a great deal of satisfaction to know that your gift will live on.
• Your estate will receive a valuable tax credit for your final tax return. The credit can be applied to up to 100% of your net income in the year of death and the preceding year. This credit can save your estate a considerable amount of tax, particularly if you have RSPs or large holdings of appreciated assets that will be deemed to have been sold at your death. Additional tax savings can be achieved through specific bequests of appreciated listed securities and mutual funds. Working with your financial advisors, we can help you maximize the tax benefits from your gift planning.
• Bequests are flexible. You may make a bequest anonymously, and you have the flexibility to change it at any time.
• With bequests of $25,000 or more, you may create a named, endowed fund that will support Conestoga forever.

Things to Consider When Making a Bequest

What type and amount of bequest do you want to make?

• You can make a general bequest of a specified amount of money.
• You can choose a residual bequest , which gives all or a percentage of the remaining estate after all debts, taxes and other bequests have been paid.
• You may choose to make a specific bequest , ensuring that Conestoga receives a specific piece of property, such as a collection of books or a financial asset.
• A contingent bequest comes into effect when you designate the College as a second beneficiary. If the first beneficiary you have named is not able to receive the gift, it is then directed to the second beneficiary.

Do you want your bequest to be unrestricted or restricted?

An unrestricted gift provides the College with flexibility to use bequests where they are needed most. However, some donors have personal philanthropic interests they wish to support through their gifts. For example, donors may specify that a particular school or program be the recipients of their bequests, or that the gift be directed toward specific Student Aid/Awards, library acquisitions, or research.

Do you want your bequest to be endowed or expendable?

If a bequest is $12,500 or more, the donor may choose to establish an endowed fund. Endowed funds provide income every year in perpetuity to carry out the wishes of the donor. Endowed funds may also be named to honour the donor or a loved one. If you decide you want your bequest to be expendable, both the principal and any income are spent for the designated purpose.

Do you want to be recognized or remain anonymous for your bequest?

Many donors choose to allow Conestoga to recognize their bequest in our donor report. This is our way of recognizing you and encouraging others to consider a similar type of gift. Bequest amounts are not disclosed. Of course, any request for anonymity is strictly honoured.

Establishing a Bequest

A bequest is a simple but powerful way to make a gift to Conestoga. If you haven't already done so, please consider putting Conestoga College Institute of Technology and Advanced Learning in your will. The Development staff at Conestoga would be pleased to work with you and/or your lawyer to help you establish a bequest, including providing sample language tailored to your specific interests.

If you have made arrangements to make a bequest to Conestoga, we request that you send us a completed Statement of Intent (pdf) form so that we may ensure proper administration of your gift.

Please contact us for more information about establishing a bequest at Conestoga.

Gifts-in-Kind

A Gift-in-Kind donation occurs when a donor voluntarily transfers title of capital property to the Conestoga. As this capital property is transferred to the College without expectation of benefit, these gifts are considered to be charitable in nature and qualify for tax receipts.

Examples of a Gift-in-Kind donation include:

• Computers
• Equipment
• Consumable supplies

Things to consider when donating capital property

In order to establish a value for the donation of the capital property a third party appraisal may be required. For capital property donations that do not exceed $1,000 it may be appropriate for a qualified faculty member to provide the appraisal; in cases where the value of the capital property exceeds $1,000 Conestoga may ask that the donor pay for the appraisal.

We would welcome inquires about Gift-in-Kind. Please contact the Development Office to discuss your donation.

 

 

Life Insurance

Giving a life insurance policy is one way to maximize your contribution to Conestoga. It enables you to make a significant, lasting gift to Conestoga with minimal outlay of current savings or income. A gift of life insurance is a deferred gift, which means the proceeds from a gift commitment made now will be realized by Conestoga sometime in the future. Donors often struggle between their desires to achieve philanthropic goals and their need to preserve their estates for their families. A gift of life insurance can eliminate this conflict.

Advantages of Gifts of Life Insurance

• A gift of life insurance allows you to make a larger donation to Conestoga than you would have thought you could afford, at relatively little cost.
• It does not reduce the value of your estate for your heirs.
• Life insurance proceeds are paid directly to Conestoga and are not subject to probate and other estate fees.
• Life insurance can provide an annual tax credit or a tax credit in the year of death. How you structure your gift will depend on where you have the greatest need for tax relief. For example:
  • You can opt to retain ownership of the life insurance policy and thus the flexibility to change the beneficiary over time as circumstances may require. If you choose this option, your estate will receive the tax credit when the gift is realized.
  • When Conestoga is both the owner and the beneficiary of a policy, the donor receives immediate tax savings. In these instances, the gift is irrevocable which means it cannot be changed.

Some Options

You can purchase a new policy.

If you name Conestoga as the irrevocable owner and beneficiary, you will receive an income tax receipt yearly for the full amount of the premiums paid. With increasing longevity, older persons can now purchase insurance at more affordable rates than were possible in the past. Retired individuals who have some annual discretionary income can support Conestoga without depleting their financial reserves or reducing the projected inheritances of family members. Greater leverage is possible when two donors, usually wife and husband, purchase a joint policy. These policies are available even if one spouse is not insurable and are generally more economical than a policy only on the insurable spouse.

You can donate an existing policy.

If you donate an existing policy that you no longer need, and name Conestoga as the irrevocable owner and beneficiary, you will receive a tax receipt for the net cash surrender value (less any outstanding policy loans) and any subsequent premiums paid. This policy can be sort of a hidden asset, available to be used now for your philanthropic purposes.

You can make Conestoga the beneficiary of a new or existing policy.

As amended in the 2000 Federal Budget, a charitable donation tax credit will be available when a donor designates that the death benefit proceeds of his/her policy are paid directly to a charity. Your estate will receive a tax credit for the proceeds of the policy when the gift is realized. This tax credit can be applied to up to 100 per cent of your net income in the year of death and the year prior.

You may have a life insurance policy from your employer or former employer that you want to donate to Conestoga.

Since you will not be able to change the ownership, you would make Conestoga the beneficiary of the policy. As above, a donations tax credit will be available when the death benefit proceeds from the policy are paid directly to Conestoga.

You may want to consider wealth replacement insurance

If making a large charitable donation is important to you, wealth replacement insurance is not complicated and it could allow you to make a large charitable gift now without affecting the legacy you want to leave to your children.

When you make your donation to Conestoga, you receive a tax receipt for the amount you donated, or the Fair Market Value if you donated other assets, such as securities, art or real estate. The next step is to purchase a life insurance policy from an insurance company, with a face value equal to the amount you donated. You name your heirs as beneficiaries, and they receive the tax-free proceeds from the policy upon your death in lieu of the donation you made to charity. The tax-free proceeds are paid to your heirs in cash. If an asset such as artwork was left to your heirs and had appreciated in value, it may have to be sold to pay capital gains tax. In the end it could diminish what your heirs receive. Depending on your age and health, you might be able to pay off the policy premiums with the tax savings resulting from your charitable gift.

Creating your Legacy with a Gift of Life Insurance

To ensure that your particular needs are met and that your wishes are honoured, you should consult your life insurance agent and any other pertinent advisors.

At the same time, you should also contact Conestoga's Development Office to let us know about your intentions. Not only can we assist you in making sure things move along smoothly, we also need to discuss how you would like the eventual proceeds from your insurance policy put to use. You may, for example, want to create a permanent endowment fund in your name, or in the name of a loved one, and direct the income to a school, program or research area of your choice, or you can direct it where it is needed most. It is also important for us to know whether you wish to be recognized for your contribution or prefer to remain anonymous. Please feel confident that any request for anonymity will be strictly honoured.

Please contact us for more information about a gift of Life Insurance to Conestoga.

Charitable Gift Annuity

If you are 65 years or older, have a desire to create a legacy at Conestoga’s, but still need the income from your assets, it may make sense to incorporate a charitable gift annuity as part of your estate plan. A charitable gift annuity can allow you to give a gift, save tax, and increase your income . When you establish a charitable gift annuity, you secure a guaranteed stream of income for life while also providing important support for Conestoga.

How it works

• You make an irrevocable contribution of $10,000 or more for a gift plus annuity.
• Part of the funds, as determined by you and Conestoga (minimum 25 per cent), becomes an immediate gift to Conestoga.
• The remaining funds are used by Conestoga to purchase an annuity from an insurance company to meet the gift annuity income obligation to you.
• The annuity income will depend on your age and the size of your contribution.
• We would be pleased to work with you on designating the gift portion to a specific area of interest to you.
• Gifts that meet minimum requirements may be used to establish named endowment funds. These continue to provide support for Conestoga in perpetuity.

The benefits to you

• Increased Income -- The rate will likely be significantly higher than what you are receiving from your fixed income investments such as a GIC.
• No Management Required - The annuity requires no management on your part. You do not have to watch investments, interest rates, maturity dates and so forth. Your payments are sent to you automatically and regularly.
• Guaranteed Income for Life - The annuity is guaranteed; it will continue as long as you live, no matter what happens to the economy or interest rates.
• Spouses can Benefit - If you're married, you may choose a joint-and-survivorship annuity that continues as long as either spouse lives.
• Tax Free Income - Depending on your age, you may get a special bonus at tax time; all or a sizeable portion of your income will be tax-free.
• Donation Receipt - You will receive a donation receipt for the amount of the gift portion to Conestoga, which will result in a tax credit.
• Realize a Dream - You will get the satisfaction of achieving a philanthropic goal and benefiting Conestoga during your lifetime.

Creating your Legacy with a Charitable Gift Annuity

To ensure that your particular needs are met and that your wishes are honored, you should consult legal and/or financial advisors. At the same time, you should also contact Conestoga's Development Office to let us know about your intentions. Not only can we assist you in making sure things move along smoothly, we also need to verify how you would like the proceeds from your charitable gift annuity put to use. You may, for example, want to create a permanent endowment fund in your name, or in the name of a loved one, and direct the income to a school, program or research area of your choice, or you can direct it where it is needed most. It is also important for us to know whether you wish to be recognized for your contribution or prefer to remain anonymous. Please feel confident that any request for anonymity will be strictly honored.

Statement of Intent

If you have made arrangements to make a legacy gift to Conestoga, we request that you send us a completed Statement of Intent (pdf) form so that we may ensure proper administration of your gift.

More Information

Please contact us for more information about establishing a Charitable Gift Annuity at Conestoga.

Retirement Benefits

As a result of the February 2000 Federal Budget, the process of naming Conestoga as a beneficiary of your registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) on your death has been simplified.

The charitable donations tax credit has been extended to include the proceeds from RRSPs and RRIFs where Conestoga is designated as beneficiary. Prior to the budget proposals, if you wanted to make Conestoga a beneficiary of one of these plans, you were required to name your estate as beneficiary of the proceeds and make a gift to Conestoga in your Will in order to qualify for the tax credit. Now you can name Conestoga as the direct beneficiary of your RRSP or RRIF . While your estate remains responsible for satisfying the income tax liabilities arising on your death (which will be offset by a tax credit described below), the proceeds may flow directly to Conestoga, potentially protecting the gift from the claims of creditors, other estate beneficiaries, probate and other estate costs.

Advantages of Gifts of Retirement Benefits

• Allows you to make a substantial gift in the future without diminishing your assets today. In other words, it costs nothing now, yet it may give you a great deal of satisfaction to know that your gift will live on.
• Your estate will receive a valuable tax credit for your final tax return. The credit can be applied to up to 100 per cent of your net income in the year of death and the preceding year. This credit can save your estate a considerable amount of tax particularly if you have large holdings of appreciated listed securities and mutual funds. Working with your financial advisors, we can help you maximize the tax benefits from your gift planning.
• As is the case with a gift through your Will, you have the flexibility to change the beneficiary at any time, as circumstances dictate.
• If the proceeds from your retirement funds are $12,500 or more, you may create a named, endowed fund that will support Conestoga forever.

Tax Benefits

Naming a charitable organization, such as Conestoga, as beneficiary of your retirement plans would result in a charitable donation tax credit that would offset taxes owed and, since the funds would not pass through your estate, they would not be subject to probate and other estate costs.

Creating a Permanent Legacy

Through a gift of $12,500 or more, you can create a named endowed fund that will provide valuable ongoing financial support in an area that is of interest to you at Conestoga. Scholarship, research and equipment funds are just a few examples of areas that could benefit from your support. In addition, you may direct your gift to a particular school or program.

How do I designate Conestoga as beneficiary on my RRSP or RRIF?

It's easy! All you have to do is go to your financial institution and make a request to change the beneficiary on your plan. They will provide you with a form to complete and the change is then made. A visit to your lawyer is not required, although we do suggest that you consult with your lawyer and/or other professional financial advisors prior to making any changes to your estate plans.

We also suggest that you contact a member of Conestoga's Development Office to discuss your intentions. It is important for us to verify how you would like the eventual proceeds from your retirement fund put to use. It is also important for us to know whether you wish to be recognized for your contribution or prefer to remain anonymous. Please feel confident that any request for anonymity will be strictly honoured.

More Information

If you have questions or would like more specific information on gifts of retirement benefits and/or named endowed funds, please contact the Development Office .

Charitable Remainder Trusts

Maybe you have assets such as cash, securities or real estate. One day, you would like to give them to Conestoga, but right now, you need the income they provide. You can always leave the assets to Conestoga in your Will, but there is another way! A Charitable Remainder Trust will allow you to make a gift now, receive immediate tax benefit and continue to receive the income for as long as you, or you and your spouse live, or for a specified number of years.

Unlike a future bequest, for which you get no tax benefit now, a Charitable Remainder Trust provides you with a donation receipt the year you make your gift. Placing the asset in trust also frees you from management responsibility and removes the property from your estate, guaranteeing your privacy.

A Charitable Remainder Trust is a legal agreement that allows you to make an irrevocable gift to Conestoga now and continue to benefit from it throughout your lifetime.

How Charitable Remainder Trusts Work

With a Charitable Remainder Trust, the donor transfers property to a trust where it is held and managed by a trustee. The trust is most commonly funded with cash, bonds, real estate or securities that are transferred irrevocably to a trustee. If the property is income producing, the net income will be paid to the donor or any other designated beneficiary. When the trust ends - usually at death or a specified term - the remainder is distributed to Conestoga. The trust is particularly beneficial from a tax standpoint for people age 70 and older.

The donation receipt the donor gets represents the value today of the future gift (the "charitable remainder") which Conestoga will receive upon the death of the donor. The figure is actuarially computed, based on the amount contributed, the age of the donor, and the current discount rate (the lower the rate, the larger the donation receipt). The value of the tax receipt can be as high as 70 per cent of the face value of the trust for donors in their eighties. The amount of the donation that may be claimed in any given year is limited to 75 per cent of the donor's net income, but the rest of it can be carried for up to five years from the time the gift is made.

You will incur capital gains tax if you contribute capital property that has increased in value since you bought it. However, you will also receive a tax receipt that will likely fully offset the tax owing.

Advantages of Charitable Remainder Trusts

• Charitable Remainder Trusts will provide you with the satisfaction of making a sizeable gift to Conestoga.
• You will continue to receive the income generated by the capital for as long as you, or you and your spouse live, or for a specified number of years.
• You will receive a donation receipt now that you can use to offset current tax liabilities.
• No matter how much taxable gain is attributable to the charitable remainder of your trust, the tax credit resulting from your donation receipt will always exceed the tax on the gain.
• A Charitable Remainder Trust removes the property from your estate, guaranteeing your privacy and reducing probate and other estate fees.
• You will be free from management responsibility of the asset.

Who Can Benefit from a Charitable Remainder Trust

• From a tax standpoint, Charitable Remainder Trusts will be primarily of interest to upper income donors who are age 70 and older.
• The donor is typically in a high marginal tax bracket, has a philanthropic intent and the ability to donate some of their assets.
• Normally a donor should be in a position to establish a trust worth at least $100,000 initially or after a few contributions, as there will be professional fees for set-up and annual administration.

Creating your Legacy with a Charitable Remainder Trust

To ensure that your particular needs are met and that your wishes are honored, you should consult legal and/or financial advisors.

At the same time, you should also contact Conestoga's Development Office to let us know about your intentions. Not only can we assist you in making sure things move along smoothly, we also need to verify how you would like the eventual proceeds from your Charitable Remainder Trust put to use. You may, for example, want to create a permanent endowment fund in your name, or in the name of a loved one, and direct the income to a faculty, department, or research area of your choice, or you can direct it where it is needed most.

It is also important for us to know whether you wish to be recognized for your contribution or prefer to remain anonymous. Please feel confident that any request for anonymity will be strictly honoured.

Statement of Intent

If you have made arrangements to make a legacy gift to Conestoga, we request that you send us a completed Statement of Intent form (pdf) so that we may ensure proper administration of your gift.

More Information

Please contact us for more information about establishing a Charitable Remainder Trust at Conestoga.

Gifts of Residual Interest

The College welcomes gifts of real estate, books, art, special collections or other property. These gifts are a valuable resource to Conestoga.

A gift of residual interest is a legal arrangement that allows you to give property to the College now and continue to use the property throughout your lifetime. For example, you might give a residual interest in a home and continue to live there, or donate a residual interest in a painting and retain possession of it.
For gifts of residual interest, the terms of the gift and the responsibilities for expenses will be specified in a deed of agreement prepared by a lawyer.

If the item you are giving to the College has increased in value since you bought it, you may incur a capital gain that is taxable. However, you will also receive a tax receipt that will likely fully offset the tax owing. (Note: this does not apply to real estate that is your primary residence.)

Tax Benefits

You will receive an immediate tax receipt for the College's remainder interest based on the fair market value of the asset or property and the ages of the life beneficiaries. The value of the tax receipt can be as high as 70 per cent of the face value of the asset or property for donors in their 80s. Also, a gift of residual interest removes the property from your estate, which will reduce probate and other estate fees. Upon your death, the College may retain the property or sell it and use the proceeds to benefit the area of your choice.

Statement of Intent

If you have made arrangements to make a gift to Conestoga, we request that you send us a completed Statement of Intent form (pdf) so that we may ensure proper administration of your gift.

More Information

Please contact the Development Office for more information about establishing a Gifts of Residual Interest at Conestoga.

Gifts of Securities

Elimination of Capital Gains Tax on Gifts of Appreciated Securities

On May 2, 2006, Jim Flaherty the Minister of Finance delivered the 2006 Federal Budget. The Budget contained an important provision that has direct implications for donors who support registered charities, such as Conestoga College Institute of Technology and Advanced Learning.

Effective immediately, the Federal Government announced the elimination of capital gains tax on gifts of publicly traded securities to registered charities . Under the old rules, donors were required to pay tax on 25 per cent of capital gains on these gifts . This new provision offers donors an opportunity to realize very significant tax savings when making a gift of appreciated securities to Conestoga.

It is important to note that if you choose to sell appreciated securities during your lifetime, or if these assets are liquidated through your estate, tax must be paid on 50 per cent of the capital gains on those securities. This new provision provides an opportunity to eliminate a significant tax liability that would otherwise eventually have to be paid.

A gift of publicly traded securities can provide you with an unexpected means to make a significant contribution to Conestoga at a relatively low-cost to you. These recent changes mean that by making a gift of equities, bonds, and mutual fund units to Conestoga, your taxable capital gain is eliminated.

Advantages of Giving Gifts of Securities

• Conestoga will issue you a charitable tax receipt for the fair market value of the gift of securities to be used for tax purposes. The fair market value will be the closing price of the securities on the date the securities are received by Conestoga.
• By giving the securities directly to Conestoga, your taxable capital gain is eliminated.
• If your donation exceeds the amount eligible for a tax credit in the year your gift is made, the excess credit may be carried forward up to five years.
• If you leave securities to Conestoga through your Will, your estate will receive the same tax benefits. Gifts made through your Will can be claimed up to 100 percent of your net annual income in the year of death and the year preceding.

How it works

Consider the following example: Mr. Brown gives the College publicly traded securities that he bought for $15,000. The securities are now worth $25,000. The capital gain is $10,000. Mr. Brown’s assumed combined federal and provincial marginal tax rate is 45 percent.

Gift of Securities to Conestoga	Previous Regulations	New Regulations
Gift amount	$25,000	$25,000
Cost base of securities	$15,000	$15,000
Capital gain on securities	$10,000	$10,000
Taxable amount of capital gain	$2,500	$0
Tax payable* on capital gain	$1,125	$0
Tax credit from gift	$11,250	$11,250
Net cost of gift	$14,875	$13,750

 

* assumes combined marginal tax rate of 45 per cent
In summary, by donating $25,000 worth of appreciated securities to Conestoga, Mr. Brown has eliminated any capital gains tax and has saved an additional $1,125 in taxes owing.

Gifts through Employee Stock Options

The reduced capital gains tax rate also applies to donations of publicly traded shares acquired through employee stock options. Certain conditions apply and the shares must be donated to Conestoga within 30 days of the stock option being exercised.

Making Your Gift to Conestoga

Any gift of securities made now or through your Will should be done in consultation with your financial or tax advisors. If you have any questions about how this change can affect your contribution to Conestoga, please contact the Development Office .

Before you donate securities to Conestoga, make sure you contact Development Office for information that you and your broker need to make giving securities easy and to discuss how you would like the proceeds from your gift to be used.