Insurance Gifts

A SIMPLE WAY TO GIVE . . .
By The Krim Charitable Capital Design Center Richard A. Krim, CLU, ChFC and Scott A. Krim,CPA

A charitable gift of life insurance can multiply the impact of your donation many times over. A gift of life insurance allows you to leverage your gift and ensure that your own personal contribution impacts Bideawee directly in a way greater then you ever thought possible. Even if you have a limited excess cash flow, you can make a meaningful gift using a life insurance policy while your charity could receive significant sums of money.

Besides the good feeling that you will get from gifting to Bideawee, the other benefits are substantial.

• You control the amounts that you gift. Your gift may be made over one, two or ten years. The amount that you gift is a charitable contribution for which you may receive an income tax charitable deduction, subject to limitations.
• The amount that you gift is leveraged. The gifts to Bideawee that are used to pay life insurance premiums are only a fraction of the amount that the charity will receive at the maturity of the life insurance policy.
• If the policy is owned by Bideawee, all rights associated with the policy belong to the charity. Therefore, they may borrow from any cash values in the policy or take loans out on the policy. (Loans and borrowing from cash values reduce the death benefit.) The benefit to the charity is immediate. Even if you die today, the charity will receive the entire death proceeds from the policy, provided they haven't borrowed against the policy.
• A policy, which is owned from inception by the charity, is not an asset included in your estate at your death. Therefore, your estate has no legal or administrative charges associated with the gift to your charity.

Gift Of An Existing Policy To A Charity
If you have an existing life insurance policy that you wish to gift to Bideawee, there are some issues you may want to consider. The simplest thing to do is to just change the beneficiary designation to Bideawee. In this scenario, you retain control of the policy during your lifetime, but will not receive a current income tax deduction. An alternate method is to change the owner and the beneficiary to Bideawee, retaining no interest in the policy. You may be eligible for an income tax charitable deduction based on the value of the policy transferred to charity, plus a deduction for contributions made to the charity to pay ongoing premiums. 

The Income Tax Charitable Deduction
Your gift to a charity generally results in the availability of an income tax charitable deduction. There are deduction limitations, depending on the form of the gift. Any unused contribution deduction in excess of the deduction limits for that year can be carried forward in each of the five succeeding taxable years. 

Conclusion
A gift of a new or existing life insurance policy to Bideawee, enables you to donate a significant amount to Bideawee while actually gifting a lesser amount through the payment of premiums. Bideawee receives the funds to carry on its good works and you receive the satisfaction of giving for all you have received. 

If you would like further information, please contact Leslie Granger, Vice President of Development at 866-262-8133 or leslie.granger@bideawee.org.