Considerations For Charitable Giving Under Alter Ego Trusts And Joint Partner Trusts

Alter Ego Trusts (AET) and Joint Partner Trusts (JPT) are estate planning tools (also known as "will-substitutes") that are available for Canadian residents who are 65 years of age or older. While there are advantages associated with the use of AET/JPTs, there may also be issues that clients should consider when engaging in the planning process. For example, if a client intends to make charitable donations upon their death, they should consider the following with their legal, tax, and other professional advisors:

How Charitable Donations on Death Can Reduce Taxes

Generally speaking, an individual or an estate that makes a donation to a registered charity that is a "qualified donee" (as defined in the Income Tax Act (the "ITA")) may be eligible to receive a donation tax credit. Your total donations limit will normally be 75% of your net income for the year. On death, the limit may increase up to 100% of your net income for your terminal return. Without