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Settlement of funds during lifetime
For many years, Ms G has supported her preferred charity with a set donation of a thousand dollars each tax year.
However she recognised that as she grows older and frailer, it will become harder for her to maintain the contribution. Accordingly she has elected to settle an amount of $20,000 for investment into the Capital Region Community Foundation with a recommendation to the trustee to apply the annual income to her preferred charity.
The gift is now a permanent charitable settlement.
The recommended charity will receive ongoing benefit from the annual income generated similar to her previous annual donation.
The funds will be invested for growth so that the annual income will grow with inflation. Accordingly the charity will potentially receive an increasing amount into the future.
The annual gift is now perpetual, something the charity can anticipate forever. Ms G may claim an income tax deduction for the total settled amount of $20,000 which she can either claim in entirety that tax year or elect to spread over up to five tax years.
Ms G receives ongoing recognition (every year) for her generosity. She can give the fund her name of choice, for instance a title to perpetuate the family name or one of family heritage.
Ms G now has her own family fund and this can be added to by further gifts as desired and even continued by future generations.
As the fund grows Ms G or her nominated successor can recommend to the trustee additional charities to participate in the annual benefit.
Ms G and other family members can make bequests to the family fund under their wills. There are capital gains tax concessions for capital growth assets left to the gift fund under will.