Estate Advisors

The University of Saskatchewan Planned Giving team is available to work with you and your client to arrange a gift that will best suit your client's charitable and financial needs.

We are professional gift planners who follow University of Saskatchewan fundraising policies and procedures, Canada Revenue Agency (CRA) regulations, and Canadian Association of Gift Planners (CAGP-ACPDPTM) ethical principles and standards. Any information shared by you or your client will be treated with the utmost discretion and respect.

If you are working wth a client who is considering the U of S in their estate plan, you may find these resources useful: University of Saskatchewan Gift Acceptance Policy, University of Saskatchewan Investment Policy and One-Page Summary of Giving Options.

For all inquiries, please contact us at:  gift.planning@usask.ca

Bequests

A charitable bequest results in a tax receipt that can be used to offset taxes owing on up to 100% of the donor's taxable income on the final tax return.

  • Any amount of the tax credit not usable on the final tax return can be carried back one year to claim a refund on up to 100% of the tax paid in the previous year.
  • For receipting purposes, subsection 118.1(5) of the Income Tax Act (Canada) deems a gift made via a Will to be made immediately before the individual has died. The subsequent value of that gift is the value on the date of death, not the value when received by the charity.

Example:

Mrs. Green leaves a $100,000 bequest in her will to the University of Saskatchewan. Upon her death, her executor transfers cash in this amount to the university. Mrs. Green's net income reportable on her final tax return is $300,000. Her income in the year prior to death was $50,000.
Bequest amount = $100,000
Tax credit (assuming 44% tax rate) = $44,000
Amount claimed on final return = $100,000 (maximum creditable is 100% of net income = $300,000)

Note: The information provided here is of a general nature and should not be taken as a substitute for professional advice. We urge you to consult with your advisors to ensure that a particular option is right for your financial and estate planning situation.

Life Insurance

If charity is designated owner and beneficiary:

  • Tax credit for value of policy and for any premiums the donor continues to pay annually.
  • Amount of contribution creditable in any one year is 75% of income. Carry-over period for excess contributions is five years.

In the case of a donation of an existing policy with equity, the excess of cash value over the adjusted cost base of policy is taxable to donor at the full income rate and not the capital gains rate.

Example:

Mr. White would like to contribute to the University of Saskatchewan in a substantial way, but he does not have current assets to do so now. He decides to purchase a life insurance policy naming the University of Saskatchewan as owner and beneficiary. The policy is for $100,000 and he makes yearly premium payments of $1,800.  The policy will be paid up after 10 years.*

Total premiums paid = $18,000
Donation receipts total = $18,000
Total tax credit (assuming 44% tax rate) = $7,920
After tax cost of policy = $18,000 - $7,920 = $10,080
Thus Mr. Leon had provided a future gift of $100,000 at a net cost of $10,080.
*A policy that will be paid up over a set period of time was used for illustration purposes. Please note that this type of policy is not always available.

Note: The information provided here is of a general nature and should not be taken as a substitute for professional advice. We urge you to consult with your advisors to ensure that a particular option is right for your financial and estate planning situation.

Securities
  • Tax receipt based on fair market value on the day ownership is transferred.
  • No capital gains tax on disposition of securities if transferred directly to the university.
  • Amount of contribution creditable in any one year is 75% of net income. Carry-over period for excess contributions is five years.

Example:

Mr. Jones donates 1000 publicly traded shares valued at $10 per share. The shares were $4 per share when Mr. Jones bought them.
Donation receipt = $10,000
Tax credit (assume 44% tax rate)= $4,400
Capital gain = $10,000 - $4,000 =$6,000
Tax on gain =$0 (since they have been donated)
Net cost of gift = $10,000 - $4,400 = $5,600
If the shares were sold first and the proceeds donated:
Capital gain = $6,000
Taxable gain = 50% X $6,000 = $3,000
Tax on gain (assuming 44% tax rate) = 44% X $3,000 = $1,320
Net tax savings = $4,500 - $1,320 = $3,180
Net cost of gift = $10,000 - $3,180 = $6,850
Therefore, a tax savings of $1,250 will be realized if the shares are donated directly to the university instead of selling them and giving the proceeds to the university.
Information Required to Initiate a Transfer

University of Saskatchewan Brokerage Firm: BMO Nesbitt Burns
Saskatoon, SK
Contact: Bonnie Guillou or Angela Kendall
Telephone: (306) 343-3692
Fax: (306) 653-7227
University's Account Number at Nesbitt Burns: 610 - 05149 - 15
Nesbitt Burns FINS Number:
(for transfers from within Canada)
T009 (T, zero, zero, 9)
Nesbitt Burns DTC Number:
(for transfers from within the United States)
50

Note: The information provided here is of a general nature and should not be taken as a substitute for professional advice. We urge you to consult with your advisors to ensure that a particular option is right for your financial and estate planning situation.

RRSPs & RRIFs
  • If the beneficiary is other than a surviving spouse or dependent(s), the value of the RRSP or RRIF will be taxed as ordinary income, often at the highest marginal rate in the year of death. Hence, it is one of the most heavily taxes estate assets to pass on to children.
  • Gifts made by naming U of S as beneficiary (either partial or 100%) on the plan documents.
  • Tax credit on donor's final income tax return based on amount contributed from the plan (part or all of assets).
  • Amount of gift creditable on final tax return is 100% of income.
  • One year carryback, also subject to 100% contribution limit
  • Not subject to probate

Example: RRSP

Mrs. McKenzie, a widow, designates her RRSP which has $50,000 assets to the University of Saskatchewan. She passes away at age 60.
Gift amount = $50,000
Tax of RRSP proceeds (assume 44% tax rate) =22,000
Tax credit =$22,000*
Net tax on RRSP =$0
Thus, the U of S receives a $50,000 gift, Mrs. McKenzie's other beneficiaries receive a $22,000 credit that results in no tax being paid on the wind-up of the RRSP.
If the gift was not made, the other beneficiaries would have received a net bequest of $28,000.
* Total tax receipt = $50,000. $22,000 offsets RRSP taxes and can also claim credit against up to 100% of net income on terminal return (with one year carryback).

Note: The information provided here is of a general nature and should not be taken as a substitute for professional advice. We urge you to consult with your advisors to ensure that a particular option is right for your financial and estate planning situation.

Real Estate
  • Tax receipt based on appraised market value.
  • 50% of gain taxable to donor.
  • Amount of contribution creditable in any one year is 75% of net income. The contribution creditable is increase by 25% of the taxable gain arising from the gift for gifts of appreciated property. The carry-forward period for excess contributions is 5 years.

Example:

Ms. Smith purchased a rural lot for $40,000 fifteen years ago and it has recently been appraised for $160,000. She donates the lot to the University of Saskatchewan. The university sells the lot and uses the proceeds.
Donation Receipt issued = $160,000
Tax credit (assuming 44% tax rate) = $160,000 X 44% = $70,400
Capital gain recognized = $160,000 - $40,000 = $120,000
Taxable gain = 50% X $120,000 = $60,000
Tax on gain = 44% X $60,000 = $26,400
Net tax savings = $70,400 (tax credit) -$26,400 (tax on gain) = $44,000 (net savings)
Net proceeds if real estate had been sold* =
$160,000 (selling price) -$26,400 (tax on gain) = $133,600 (net proceeds to donate)
Net cost of donating real estate instead of selling first =
$133,600 - $44,000 = $89,600

* For illustration purposes, selling costs have been omitted and the selling price is assumed to be equal to appraised value.

Note: The information provided here is of a general nature and should not be taken as a substitute for professional advice. We urge you to consult with your advisors to ensure that a particular option is right for your financial and estate planning situation.