Life Insurance in a Gift Plan

Life insurance is a valuable gift option that is often overlooked.  Life insurance is frequently purchased as part of an overall financial or estate plan.  As circumstances in life change, the need for insurance may diminish. A gift of a Life Insurance policy can provide tremendous benefits to a charity.  The charity may either wait and receive the death benefit when you pass on, or they may choose to sell the policy if their needs are more immediate.

Another reason to think of Life Insurance as a gift is that it leverages what gift you may be able to make to support the organizations you care for.  For instance, if you have $100,000 that you wish to gift to a charity, you may purchase a Life Insurance Policy for many times that value and donate it to the charity of your chosing.

How Do I Make a Gift of Life Insurance with Cash Value using Gift-Planning Tools?
Many people gifting to charity worry about how much will be left for their children and other loved ones.  If you gift other assets to charity you can take an immediate tax deduction and to replace that wealth for your loved ones you can purchase Life Insurance within an Irrevocable Life Insurance Trust (ILIT) which will remain outside of your estate and go to your heirs tax free.  This type of strategy is often used with a Charitable Remainder Unitrust.  Using this concept, a highly appreciated asset is transferred to a charitable remainder trust, sold in the tax-free environment of the trust and reinvested.  Income is paid to you, and a portion of that income is given to the ILIT to pay the premiums on the policy to benefit your loved ones.  Advanced Legal Planning, LLC would be happy to work with your other advisors to design a plan that will achieve your goals. 

Assets Used With This Tool (Life Insurance in a Gift Plan)

• Life Insurance Policy