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Your client can make a significant contribution to the community
without making a large gift today by donating a life insurance
policy to the Foundation. Donors can give existing policies
that are no longer needed, or establish a new policy with
the Foundation as the owner and beneficiary. The proceeds
of the gift can create a new endowment fund in the future
for causes that are important to your client.
To make a gifts of a new life insurance policy, your client
can establish a policy and designate the Foundation as the
owner and beneficiary. New life insurance policy gifts are
especially attractive to younger donors who have other financial
commitments today but wish to make a significant gift in the
future.
Your client can also donate an existing policy. This kind
of donation is relatively simple. It is made by signing a
change of ownership/beneficiary form supplied by the insurance
company. Your client may then claim a charitable deducation
for approximately the policy's cash value. The proceeds of
the policy are completely removed from his or her estate.
Donors are only required to make contributions to the Foundation
in lieu of any premium payments due on the policy. These contributions
are tax-deductible.
Example:
Your client purchases a life insurance policy on her life
and the life of her spouse with a face value of $100,000.
She designates the Foundation as the owner and beneficiary.
She has specified that the proceeds will create a named
endowment fund at the Foundation, with the Jewish Community
Federation of the Greater East Bay as the ultimate beneficiary.
She makes a contribution to the Foundation in the amount of
the premium due, and the Foundation then pays the premium.
She takes a tax deduction for the contribution. When the Foundation
receives the proceeds, a named PACE fund is established to
make annual contributions to the Federation's annual campaign
in perpetuity.
At a glance:
- Allows your client to leave a legacy tomorrow without
major financial commitments today
- Donation of an existing policy creates a tax deduction
and removes an estate asset
- Contributions in lieu of premiums are tax-deductible
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