Life Insurance as a Gift
Life insurance policies are an excellent vehicle for charitable
gifts, often enabling donors to achieve family and charitable goals simultaneously.
What are my options?
- For insurance policies with a cash surrender value whose
original purpose no longer exists, you can:
- Gift the policy to Greater Worcester Community Foundation,
Inc., and receive an income tax deduction for the present value
of the policy. The tax savings can be invested to generate future
income and will reduce the value of your taxable estate.
- Make Greater Worcester Community Foundation, Inc.,
the owner and irrevocable beneficiary; you continue to pay the premiums
and claim continuing tax deductions. It is possible to use appreciated
stock as a gift to Greater Worcester Community Foundation to cover
premium costs and avoid capital gains.
- Insurance for wealth replacement — When larger amounts,
multiple heirs and a taxable estate are involved, a separate irrevocable
life insurance wealth replacement trust can be the owner of the life insurance
policy. With proper structure and procedures, transfers to the trust can
be nontaxable, and distributions of death benefits through the trust to
heirs are not in the estate for tax purposes. A life insurance wealth replacement
trust can also be used to offset funding of charitable remainder trust.
For more information on using insurance policies to achieve
your charitable goals, contact Ann
T. Lisi, executive director at (508) 755-0980.
Giving Later
