Ask any widow or widower andthey will tell you that it is better to be over-insuredrather than under-insured. Consequently, if you have ample assets to providefor your loved ones, then you may have life insurance you really don't need. Haveyou ever considered donating your life insurance policy to charity?
Many of us tend to think ofcharity as an act of signing over an immediate gift. Nevertheless, evenproducts like life insurance policies are important charitable contributions.What seems like a relatively small contribution now can have a big payofflater.
The Wall Street Journal considered the ins-and-outs of donating lifeinsurance in a recent article titled â€œDonating a Life-Insurance Policy to aCharity.â€
Basically, you have twofundamental options when it comes to being charitable with your life insurancepolicy. First, you can designate the charity as your primary beneficiary andthe proceeds will pass upon your death. This approach provides a tax benefit toyour estate, but no lifetime tax benefit to you.
Alternatively, you can give thelife insurance policy itself to the charity right now and enjoy tax benefitsright now just as with any other immediate charitable contribution. Once thepolicy is owned by the charity, the charity can designate itself as the primarybeneficiary.
This latter alternative, giftingthe ownership now, also means you can get further tax benefits by continuing tomake cash gifts to the charity so it can continue to pay the life insurancepremiums. This is pretty savvy, if you currently support the same charity withcash donations.
These are notions worthexploring, if you truly have life insurance that no longer serves the purposefor which it was acquired. However, do make sure your family security isassured before taking action.
At IdahoEstate Planning we are the expertsyou need to know and trust. Work with us and we'll put together a plan thatworks for you and your loved ones. Remember, goodplanning is no accident.