Charitable Planning

Perhaps you have already provided for your family or you simply want to leave a gift to the charitable organizations that have meant so much to you over the years. A life insurance policy is a great way to accomplish that goal.  

As long as you continue to pay the premiums on your life insurance policy, the charity is guaranteed to receive 100 percent of the policy when you die because the policy is not subject to income and estate taxes, probate costs and other expenses. You could even benefit from the tax rules.  

Potential Tax Benefits 

Depending on how you structure your gift, you may be able to take an income tax deduction equal to your basis in the policy or its fair market value. You may also be able to deduct the premiums you pay for the policy on your annual income tax return. 

Example: A 50-year-old, non-smoking couple committed to giving $12,000 annually for 10 years. The $120,000 gift could turn into a $1 million gift if it is not paid out until the second person dies. When you factor in the charitable tax deduction on the premium, the internal rate of return at joint life expectancy is between 10% and 11%. 

If you are currently making annual gifts, have deferred pledges or are planning a large one-time gift, consider life insurance as a tool to enhance and guarantee the ultimate benefits to your favorite charity. 

Contact an advisor today to learn more.