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perpetual charitable trust under will
Ms F holds a sizable share portfolio that she has built up during her career: from her superannuation and an inheritance from the estate of her late father who had been a diplomat.
She has not married and has no children. She is fond of her nieces who are successful in their own right.
She appreciates her comfortable life style and wishes to help those who have not been as fortunate. She intends to achieve this by leaving her estate under her will to the benefit of her favoured charities.
However she would like her share portfolio to be maintained. She has always protected her capital while living off her income and wishes this to continue after her death with her favoured charities receiving the income.
Miss F consults her solicitor in regard to her will and her solicitor recommends a perpetual charitable testamentary trust.
Under her will, she provides for her estate to be retained and invested through the Capital Region Community Foundation. Income is to be paid to her recommended charities on an annual basis. Miss F selects her family name as title for the fund in memory of her father. She hopes that her nieces and their children will support the fund into the future and nominates one of her nieces as appointor for recommending recipient charities into the years that come.
There are taxation benefits available to her estate. As the foundation is a deductible gift recipient, there will be no capital gains tax liability in regard to growth in her share portfolio. Additionally dividend imputation credits on dividends may be recovered within the foundation.
The portfolio will continue to grow with resultant increase in annual income. Accordingly recommended charities will receive an increasing amount into the future. The annual gifts are now perpetual, something the charities can benefit from forever.