Life insurance provides an easy way to continue your lifetime of giving. If you are currently making annual gifts to us and would like for these to continue beyond your lifetime, you may wish to consider a gift of an existing life insurance policy. It’s an easy way to make a lasting gift.
If you would like to discuss making the Foundation owner and beneficiary of an existing policy, or establishing a new policy, reach out to a development officer today or request our Guide to Planned Giving.
Planning Idea #1. By naming the Foundation as the beneficiary of an existing life insurance policy, your estate could save significant tax dollars. Every dollar going to us – or another qualifying charitable institution or organization – will be deductible as a charitable contribution for estate tax purposes. (For the estate tax, there are no limitations on the charitable deduction as there are for income tax purposes.)
Planning Idea #2. Alternately, you could make a charitable gift of a life insurance policy during your lifetime and also garner an income tax charitable deduction if you name us as the owner and beneficiary of the policy. (Important note: Unlike lifetime gifts of retirement accounts, there are generally no adverse tax consequences for making a lifetime gift of a life insurance policy.)
Planning Idea #3. Perhaps a more complex arrangement, such as an irrevocable life insurance trust, would be better for your particular tax planning circumstances. For instance, you could arrange for your insurance proceeds to be used first for the support of your spouse and children, and then, at a later date, be distributed outright to the Foundation.
Giving An Existing Life Insurance Policy
Whatever its origin, you may have more life insurance than you realize. When your children were younger, you may have purchased a life insurance policy to insure their education, or for some other purpose. Now, years later, you find that your children are grown, well-educated, and out on their own. Or, maybe you have an insurance policy in force primarily to pay the mortgage on your home in the event of your premature death. And now the amount left on the mortgage may be so modest (or zero!) that it is no longer necessary to maintain the policy.
How To Make A Gift of Life Insurance
If your situation is similar to one of those described above, a charitable gift of that life insurance may be a good solution. It’s easy to contribute a life insurance policy to the MCG Foundation. Just check with your financial planner or life insurance agent for details on which forms to complete. Check with your estate planning attorney and accountant for additional guidance.
For Additional Information
Estate planning through retirement accounts and life insurance policies can be complex – yet very rewarding. You can save significant tax dollars while leaving a lasting legacy. This material provides only a brief introduction. We would be pleased to provide you, your attorney, your accountant, your financial planner, or other advisor with additional information and be of assistance in any way possible. Thank you for your interest and support.