Giving The Gift Of Lifeinsurance, That Is
Many people in and around Baltimore are interested in charitable giving but are concerned
that the substantial gift they would prefer to make could affect their familys current lifestyle or security. Fortunately, there are ways to structure gifts in such a way that they wont have an impact on day-to-day livingeither by designating an organization to receive assets in the future, or via an immediate gift of assets that are considered out of sight, out of mind. One example of this is, if one has life insurance in Baltimore, by gifting a life insurance policy to a charitable organization. In some cases, such a gift can even provide an opportunity for tax savings.Life insurance can provide such a gift
A life insurance agent can provide the professional advice thats needed to set up a comprehensive insurance program, as well as provide assistance for those who would like to provide a gift to a an organization from a life insurance policy. Simply contact the agent, who will request a Change of Beneficiary/Ownership form from the life insurance company and assist in completing and returning the form. Designate the chosen charitable organization as the new owner and beneficiary of the life policy. The organization will receive the amount specified in the policy upon the death of the donor.
What about tax implications for the donor?
A life insurance policy that is gifted to an organization while the person is still alive may result in an immediate tax deduction for the current policy value. In order to obtain the deduction when the charitable organization is the policyowner, the donor would make donations to the organization to provide funds to pay for the insurance premiums. In other words, by making regular additional monetary gifts to the charitable organization, the donor covers the premium payments that the charitable organization now makes on the policy that has been gifted. If the door retains ownership of the life insurance policy, benefits that are payable to the charitable organization upon the death of the donor could provide savings on federal and state estate taxes, depending on the size of the estate and the donors state of legal residency.
Gifting a life insurance policy is a wonderful act of generosity, yet it should be made with a clear understanding of any financial considerations that may apply. Check with a tax attorney and a Baltimore life insurance insurance agent for details regarding ones specific tax implications for gifting life insurance policies to a charitable organization.
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