Giving with life insurance is a creative way to donate to the Wye Marsh at a relatively low cost. Paying modest life insurance premiums today can provide a significant gift in the future.
Life insurance is a product which is purchased for as many reasons as there are individual policy holders. You may have purchased a life insurance policy for your child’s education that was not used, or perhaps you have an old life insurance policy purchased for you by your parents when you were a child. These policies could make a wonderful gift to the Wye Marsh, and provide you with significant tax savings.
Naming a charity such as the Friends of Wye Marsh as the owner and beneficiary of a life insurance policy can entitle you to income tax credits on premium payments or an income tax receipt for the cash value of an existing policy in the year that it is donated. While you may no longer need the policy for the purpose which it was originally purchased, it could provide you with a means of receiving considerable savings on your income tax or on the distribution of your estate.
There are several ways you can use life insurance to make a gift to the Wye Marsh. You can donate a policy you own but no longer need, or buy a new one as your gift.
Alternatively, if you have other assets you’d like to contribute, you can use life insurance to replace the value of those assets for your heirs.
Giving the proceeds of a policy:
You can give the proceeds of your life insurance policy, payable at death, to the Friends of Wye Marsh. This can be done by changing the beneficiary to the Friends of Wye Marsh, or you may name your estate the beneficiary of the death proceeds and bequest these funds to the Friends of Wye Marsh through your will.
Either way will result in a tax receipt issued to your estate which will offset taxes owed on the final tax return. If the donation receipt exceeds 100% of your income in the year of death, the remaining portion may be carried backward to the previous year. The 100% limitation will apply to that earlier year also.
Giving the policy itself:
In addition to naming the Friends of Wye Marsh as beneficiary, you can also transfer ownership of the policy to the Friends of Wye Marsh. That will make your gift irrevocable and you will receive an immediate charitable receipt for the full cash value of the policy which you can apply against this year’s income. If the donation is more than 75% of your income for the year, you
The information provided on these pages is general in nature and not intended to be a substitute for professional legal or financial planning advice. Wye Marsh encourages all donors who are planning a significant gift to seek independent legal and/or financial planning advice.