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You can donate
your life insurance policy to Shadow Cats. In
fact, insurance can be a good way to leverage
affordable premium payments into a substantial
future donation.
There are several
different ways you can give your life insurance
policy (or the death benefits from it) to Shadow
Cats. Each method has different advantages and
disadvantages to both you and the Shadow Cats.
One way to help is to simply name Shadow Cats as
a beneficiary on your policy. When you die, the
Shadow Cats will receive the death benefits. A
disadvantage of this approach is that you will
not get to take the charitable income tax
deduction for the premium payments that you
make. With this method, there are no gift tax
implications. The proceeds of the policy will
be includable in your taxable estate, but you
will receive an offsetting estate tax charitable
deduction.
Another way is to
donate an existing life insurance policy to us.
You will be able to claim an income tax
deduction for either the tax basis or the fair
market value of the policy (whichever is less)
for the year of the donation. You can then make
deductible cash gifts to Shadow Cats, which we
can use to make the premium payments. The
proceeds of the policy may be includable in your
taxable estate, but you will receive an
offsetting estate tax charitable deduction.
Note: Some states' laws do not consider a
charity to have an insurable interest in a donor
and will not allow a charity to purchase a life
insurance policy on a donor.
There are a
number of different strategies from which to
choose, as well as a number of tax rules and
differing state laws that may influence your
decision. If you are considering a substantial
gift of life insurance to a charity, ask your
attorney or tax advisor to help you decide on
the best approach.
Source:
Insurance.com |
