Gifts of Life Insurance
There are several ways to give.
Individuals who desire to give to Camp Tecumseh have many options on how to give. One of the most effective means to maximize giving is to use the gift of life insurance. There are several ways to give life insurance. While there are many different types of life insurance, the principle of giving remains the same: a relatively small present gift will ultimately provide a much larger gift in the future. The following will explain how this works:
Gifts of Existing Insurance
You have a life insurance policy in force which:
- is no longer needed to provide for the survivors of the person who is insured;
- will add to the size of someone’s taxable estate without providing any real benefit to survivors;
- is an old policy and does not provide a good economic return for the owner’s planning purposes.
These policies can be given as a current gift to YMCA Camp Tecumseh. In so doing, Camp Tecumseh would receive:
- a large gift at the death of the insured
- the potential of using the cash value in the policy for current needs, if a policy which has cash value is donated. Camp would follow the donor’s wishes in this regard.
In return for giving the policy, the donor receives a:
- current tax deduction for the amount of the cash value in the policy;
- reduction in the size of the donors taxable estate (if applicable).
A 60-year-old person owns a policy with a $100,000 death benefit, which has been in force for 15 years and has $15,000 in cash value. When given as a gift, the following occurs:
- Camp Tecumseh will receive $100,000 at the time of the insured person’s death. (Therefore, a small gift of $15,000 will provide a much larger gift of $100,000 to the camp ministry.)
- Camp Tecumseh can utilize the cash value of the policy should the need arise and the donor concurs.
- The $15,000 cash value will provide an immediate charitable tax deduction for the gift donor.
- The donor will reduce the size of his/her taxable estate by the amount of the death benefit – $100,000. This would result in reducing the estate taxes owed by up to $55,000, depending on the donor’s estate tax bracket if it is a taxable estate.
Another way to give life insurance as a gift is to donate only the death benefit of the policy. In this case, the insured or owner of the policy would give the death benefit to Camp Tecumseh by designating it as the beneficiary of the policy. The donor would retain ownership and control of the policy while still giving a gift to camp at death. This would keep the death benefit out of the policy owner’s estate but still allow him/her to retain the use of the policy’s cash value while he or she is still alive, if needed.
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*The information contained herein is for explanatory purposes only and is not intended to be used as tax advice. Camp Tecumseh YMCA recommends that you contact a professional tax advisor who can provide you with additional information on how your participation in the above program may affect your personal tax situation.