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Planned Giving: 2010 and Beyond

Planned Giving: 2010 and Beyond. Presented to Southern Alberta Round Table May 9, 2011. Presented by DeWayne Osborn CGA, CFP Lawton Partners. Planned Giving: 2010 and Beyond. Presentation Overview Discuss significant legislation Discuss trends/possible future Questions.

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Planned Giving: 2010 and Beyond

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  1. Planned Giving: 2010 and Beyond Presented to Southern Alberta Round Table May 9, 2011 Presented by DeWayne Osborn CGA, CFP Lawton Partners

  2. Planned Giving: 2010 and Beyond Presentation Overview Discuss significant legislation Discuss trends/possible future Questions

  3. Planned Giving: 2010 and Beyond The Road Behind Us

  4. Planned Giving: 2010 and Beyond Zero inclusion on capital gains Well understood • Applies to gifts to public charities • Mutual and segregated funds, warrants, rights, and stock LISTED on Tier 1 and 2 exchanges • Applies to individual and non-individual (e.g., corporate) donors • Since 1997…

  5. Planned Giving: 2010 and Beyond Zero inclusion on capital gains Not well understood • Zero-inclusion capital gains apply to qualifying private foundations • Tax-free portion eligible for CDA

  6. Planned Giving: 2010 and Beyond ITA Sections 248(30)–(41)

  7. Planned Giving: 2010 and Beyond • Split receipting (eligible amount, advantage [248(30,31)]) • Deemed value of gift = lesser of FMV and cost (or ACB) if gifted within three years [248(35)] • Now includes insurance policies • Non-arms-length property subject to 10-year rule [248(36)] Not even Close to Understanding!!

  8. Planned Giving: 2010 and Beyond • Gift = nilif donor, prior to the gift, fails to disclose that 248(31), (35), (36), (38), or (39) would apply

  9. Avoid 248(35)… Misunderstood Planned Giving: 2010 and Beyond • listed security • real or immovable property in Canada • cultural • ecological • a privately held capital share • property subject to 85(1) or (2)

  10. Planned Giving: 2010 and Beyond • Bequests 100% of Net Income • Life Insurance Proceeds • RRIF, TFA, RSP • Caught Advisors Attention • 1996…..

  11. Disbursement Quota Amendments Planned Giving: 2010 and Beyond • 3.5% FMV over 24 months • Simplified administration • No DQ for charitable organizations with assets <$100,000 OR • for foundations with assets <$25,000

  12. TraditionalEndowments Planned Giving: 2010 and Beyond • One of oldest forms of recognition • Now $25,000 to $50,000 typical for named Endowment • Perpetual funding • Preservation of capital • Spending 3 to 5% annually Understood

  13. Planned Giving: 2010 and Beyond Donor Advised Funds • More recent • Donor has more control • Emergence of “Retail Charities” • Higher thresholds • Admin fees

  14. Planned Giving: 2010 and Beyond

  15. The Road Ahead Planned Giving: 2010 and Beyond

  16. The Road Ahead Planned Giving: 2010 and Beyond

  17. $millions and millions in gifts available • Boomers can’t take it with them • Wealth is accumulating • Mortality realization • Bequest is still #1 • Holdco gifts increasing • Excess holdings regime Planned Giving: 2010 and Beyond

  18. $Millions and $millions in gifts available • 15,000+ Private Foundations • 5,000 without trying • Easier than ever • Flexibility is King! • Rigid = no gift • Duty over Passion • Policy makeover Planned Giving: 2010 and Beyond

  19. $Millions and $millions in gifts available • 15,000+ Private Foundations Planned Giving: 2010 and Beyond More rules and regulations • Did I say 15,000 private fdns?? • $6 Billion/170,000 • What is the next one? • Real estate? CRA/Finance

  20. $Millions and $millions in gifts available • 15,000+ Private Foundations • More rules and regulations • More expense (e.g. valuations) • Advantage/Eligible amount • 248(35) Planned Giving: 2010 and Beyond

  21. Planned Giving: 2010 and Beyond • $Millions and $millions in gifts available • 15,000+ Private Foundations • More rules and regulations • More expense (e.g. valuations) • Lapsing gifts / Trust/Residual issues • 20 years into some gifts • Something has to go wrong! • Charities litigated • Interest rates all time low • ART/YRT • Poor gift maintenance • 15,000 private fdns!

  22. $Millions and $millions in gifts available • 15,000+ Private Foundations • More rules and regulations • More expense (e.g. valuations) • Lapsing gifts / Trust/Residual issues • Challenges to “traditional thinking” • Capital in Endowments • Income spending Planned Giving: 2010 and Beyond • Emergence of the Hostile DAF? • More, More, More….

  23. $Millions and $millions in gifts available • 15,000+ Private Foundations • More rules and regulations • More expense (e.g. valuations) • Lapsing gifts / Trust/Residual issues • Challenges to “traditional thinking” • Increased policy flexibility required • Duty over Passion • Did I say 15,000 Private Fdns?? • Traditional endowment • Super DAF, Flex Endowment • Change existing agreements?? Planned Giving: 2010 and Beyond

  24. $Millions and $millions in gifts available • 15,000+ Private Foundations • More rules and regulations • More expense (e.g. valuations) • Lapsing gifts / Trust/Residual issues • Challenges to “traditional thinking” • Increased policy flexibility required • Increased abuses/scams • Donors will not change! • DQ gone Planned Giving: 2010 and Beyond • 15,000 private fdns!!! Shyster, Shyster & Thief LLP

  25. Planned Giving:

  26. Questions??? Thank You DeWayne Osborn 1-888-944-1144 (ext 256) dosborn@lawtonpartners.ca Planned Giving:

  27. Questions??? Thank You DeWayne Osborn 1-888-944-1144 (ext 256) dosborn@lawtonpartners.ca Planned Giving:

  28. Questions??? Thank You DeWayne Osborn 1-888-944-1144 (ext 256) dosborn@lawtonpartners.ca Planned Giving:

  29. Questions??? Thank You DeWayne Osborn 1-888-944-1144 (ext 256) dosborn@lawtonpartners.ca Planned Giving:

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