Bequests | Charitable Remainder Trusts | Life Insurance Policies | Endowments

Many individuals have life insurance policies that can be employed to benefit charities when the insured dies or, in some cases, during the insured's life. In order to implement this charitable strategy it is possible to purchase a new life insurance policy or, employ a life insurance policy which you no longer need for your family.

In this context, one simple approach is to name the charity of choice as the beneficiary under the life insurance policy so that the death benefit would be paid directly to that charity. This strategy could avoid probate taxes or fees on the amount of the gift and provide confidentiality.

Upon death, the death benefit is paid by the Life Insurance Company directly to the charity of choice and the charity issues a tax receipt that can be used on your final tax return.

In the event you have an old life insurance policy, which is no longer required for your personal needs, you could gift or assign the policy to the charity of choice while you are alive rather than cancel the policy. The charity would receive the life insurance proceeds upon death. When you absolutely assign a life insurance policy to a charity, the legal ownership of the policy falls to the charity. In the event there is any cash value at the time of the assignment you may be entitled to receive a tax receipt for a charitable donation for that cash value. In the event you continue to pay premiums to keep the policy in force after it has been assigned, you may also qualify for a charitable receipt in relation to this premium.

In addition, you could make a Planned Gift by purchasing a new life insurance policy. Once a life insurance policy is established with a charitable organization designated as the owner and beneficiary, all premiums paid on the policy are deemed to be a charitable donation and the insurance proceeds will produce a charitable donation deduction on your annual income tax return upon death.

Your Life Insurance Company can provide information to you on this type of donation.