Gifting Life Insurance or Securities

When considering the best way to potentially support the Foundation, there are several options that will benefit both you and the organization.

Life Insurance

Donating life insurance to a charity can be an excellent way to transform affordable premium payments into a substantial future donation. There can also be tax saving benefits.

There are three ways you can use life insurance to donate to charity:

  • Name a charity as the beneficiary on your policy – The charity receives the insurance proceeds like a regular beneficiary would, but the payments to the charity are considered a donation in the year of death. The receipt issued qualifies for a tax credit that can offset the income tax liability on your estate.This is quite beneficial if you’ve accumulated certain assets that would be subject to a significant tax liability upon your death. It may allow your heirs to receive a higher value of your estate and the charity to receive a significant gift.
  • Donate an existing or new life insurance policy directly to a charity – You receive an official tax receipt for any cash value present at the time the donation is made on a paid-up policy. This provides an immediate tax benefit while you are living.After you make the initial donation of a new policy, you can make deductible cash gifts to the charity, which the charity can then use to make the premium payments, or you can pay the premiums directly to the insurance company. In either case you will get a tax receipt reflecting the premiums paid.

This also facilitates keeping the gift private and a faster payment to the charity.

  •  Donate certain assets to a charity and use a life insurance policy to replace the value of the donated assets – You receive a charitable tax receipt for the amount you donate, or the fair market value, if you donate other assets, such as securities or property. With the tax savings resulting from the charitable gift, you can purchase a life insurance policy for the value of assets donated, naming your heirs as beneficiaries—a process called “wealth replacement”.The proceeds of the policy will not be included in your estate for probate tax purposes and are payable tax free to your heirs as part of their inheritance. This option ensures that your estate is not diminished even though you are making a significant donation.

We recommend speaking with your tax adviser as you consider your options for gifting life insurance.

Gift of Securities

Making a gift of securities is a tax effective way to help individuals and families in Edmonton now or in the future as part of your estate planning.

If you donate publicly traded securities that have increased in value directly to the Mental Health Foundation you do not have to pay tax on the capital gain.

Publicly traded securities include:

  • public company shares
  • mutual fund units
  • bonds

To donate gifts of securities, please use the Securities Transfer Form (click to open)

Three easy steps:

1. Complete the Securities Transfer Form.

2. Notify the Mental Health Foundation for processing as described in the Securities Transfer form.

3. Fax or send the completed transfer form to your broker or investment adviser.

A tax receipt will be issued upon receipt of securities.

No matter which way you choose, you can be assured that your gift will make a difference. It’s a simple and powerful way to help those in your community who struggle with mental illness, while leaving a lasting legacy. 

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