Gifts of Life Insurance
There are a variety of ways to use life insurance for a substantial gift to Southeastern. As examples, you can:
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Donate a paid-up policy originally purchased to satisfy a need that no longer exists. Typically, you would irrevocably designate Southeastern as the beneficiary and owner of the policy.* You would be entitled to an income tax charitable deduction equal to the "replacement" value or cost basis, whichever is less.
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Give a policy that is not fully paid up, and take a deduction for the "present value" of the policy (approximately the cash surrender value or cost basis, whichever is less). If you then continue to make premium payments, they are deductible for income tax purposes.
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Take out a new policy, naming Southeastern as the beneficiary and owner. Your premium payments would be tax-deductible.
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Establish a charitable remainder unitrust with a life insurance policy (against which the insured has not borrowed). The premium payments would be partially tax-deductible. The trust will provide a future lifetime income for your surviving spouse or other beneficiary.
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Use life insurance as a "replacement" asset. You donate property to Southeastern and replace the dollar value of the asset with life insurance for your heirs. The income tax savings from your gift may be sufficient to pay for the insurance. Through this arrangement, you may be able to replace a nonliquid asset (such as a residence) that would be subject to estate taxes with a highly liquid asset (the insurance policy) that can pass tax-free to your heirs.
For more information, please contact:
Lynn Harris Horgan
(985) 549-2239
or toll free (866) 474-4438
email to: lhorgan@selu.edu