Gifts of Residual Interest

Customizing your gift to meet your unique needs

Many people don't realize that they can have the satisfaction of making a major gift to the Anglican Church now and see the gift in action long before a typical bequest donation. One donor said, "Its like having your cake and eating it too." Making a major gift now can give you a significant and immediate tax benefit, yet you can continue to use and enjoy your gift of property for the balance of your life!

How can this be you ask? The gift is known as a gift of residual interest with retained life use. These gifts usually involve gifting of a principal residence or other personal real estate such as a cottage or rental property.

In making a gift of residual interest in property the donor transfers the property irrevocably to the Anglican Church. However, as the donor, you retain the use of the property for your lifetime, and, if you wish, for as long as your spouse lives as well.

An example…

Giving your Principal Residence to the Church

Diane Reed, 72, owns a home valued at $200,000. She would like to live in it for many more years, but would like the Diocese of Niagara to have the home when she dies. After looking at many options and satisfying herself that this type of gift was right for her individual circumstances, Diane decides to give the diocese the home now while retaining a life interest for herself.

She receives a donation receipt for $85,421 which, assuming a 48% combined tax credit, will reduce her income taxes by $41,002 over the next five years. (The portion of the donation receipt which she may claim in any given year is limited to 75 percent of her income. She has the gift year and five additional years to use the full amount.)

Because Diane's house is her principal residence, she realizes no taxable gain at the time of the transfer, no matter how much the value has gone up since she bought it. While she lives in the house, Diane will be responsible for maintenance and other expenses specified in her gift agreement with the Anglican diocese. If it becomes necessary for Diane to give up the house prior to her death she has several options open to her. She can rent the house and keep the income from that, give her life interest to the diocese early and get an additional donation receipt, or she and the church can jointly sell their respective interests in the property to

Assessing the Benefits to the Donor

In this example, Diane is able to make a very significant gift to the church and obtain a very large tax benefit. Diane is able to see her gift at work in the ministry of the church which brings her great personal satisfaction. The disadvantage to the donor is that the gift is irrevocable and you lose some (but not total) control of the asset. These gifts work best for donors 75 years or older. Specific issues such as appraisal, capital gains (except on a principal residence), upkeep and insurance need to be carefully considered.

Financial Plan

As this series of Planned Giving booklets illustrates, charitable giving strategies can be simple or very complex. Your own, personal circumstances may further complicate the issue. In some cases you will receive the most benefit and bless the church by combining planned giving strategies.

You may have a good idea of the gifting strategies that will work for you and your situation. Keep in mind that tax rules are not static. They continue to change and the Anglican church in this diocese strongly recommends that you consult a financial advisor prior to making any gift to the church. Personal financial planning needs to be integrated into charitable giving. Its good stewardship. You owe it to yourself and your loved ones.

Your Gift can Truly Make an Impact on Ministry...

We know from talking to donors that you want your gift to truly make an impact on the lives of the people in your community. Gifts of residual interest create that opportunity as donors are able to give significantly larger gifts than they might otherwise be able. Of course, we will work with you to ensure your gift is dedicated to ministry projects dear to your heart.

Youth Ministry Fund

Outreach in the Name of Christ Fund

Education & Training Fund

Divinity Students' Fund

Evangelism Fund

Bishop's Company Endowment