Published: July 23, 2008 11:53 am            

Foundation has busy summer

What an unusual summer we are having. I realize that you can wait 24 hours in Indiana and the weather can change, but from 70 degrees to 90 degrees in one day! It has been a busy summer at the Community Foundation with the annual dinner, the scholarship banquet, and then the golf outing. We are now busy at the 4-H Fair and then school starts. Time does fly.

Because our lives are always busy, there are things that we tend to put off for another time. Important matters such as seeing our attorney to write a will, discuss with our family what charities we want to remember in our planning, or discuss with our professional advisors what assets we should use for family and which for favored charities.

Over the last several months, I have discussed bequests and retirement plans to include in your planned gift discussions. This month I would like to discuss life insurance policies.

Do you have a life insurance policy that was sold to you years ago with the promise of protecting a growing family or covering your mortgage and educational costs? Are you now at a different time in your life? With retirement growing closer each year and the children out on their own, your policy may have outlasted its original purpose. A life insurance policy can transform a small gift into a substantial gift.

We have good news to share. You may be able to use that insurance policy now to your and your community’s advantage. Gifts of life insurance can be used to establish your fund within the Hendricks County Community Foundation that will benefit your favorite charity or charities. I used the word “charities” because you can designate multiple charities in your family fund at the Community Foundation. Life insurance can also serve as a great replacement option for your heirs if you gift other assets to charity.

The benefits of gifting life insurance are many, including:

n You can be a substantial donor to your favorite charity for a few dollars a year.

n You may receive an income tax deduction for essentially the replacement value of the policy, and any future premium payments you make if the Community Foundation is both the policy owner and beneficiary.

n You may also be able to remove the proceeds from the policy from your estate entirely for estate tax purposes.

n You can use the policy to ensure a gift pledge that may otherwise become difficult to fulfill.

n If you discontinue premium payments, any accumulation will still be a worthwhile charitable gift.

n If you do not wish to gift your existing policy, you may purchase a new one that is assigned to the foundation for gifting.

n If you do not want to gift an entire policy, you may be able to gift dividends or name the foundation as one of multiple beneficiaries to retain a portion of the proceeds for family members or others.

n A gift of life insurance can be one of the least complex gifts with the greatest impact you can give.

Life insurance can also be effective in replacing the worth of other assets that may be a better option for gifting to charity. For example, instead of leaving the family home for your children to deal with or retirement assets that may be diminished by up to 75 percent from multiple taxes, a charitable organization can receive various assets without tax consequences. Life insurance then is used in an irrevocable life insurance trust to replace what would have gone to the children. The children can receive proceeds through the trust equal to the value of the asset gifted — tax free.

Regardless of which option you use, charitable giving with life insurance can be an affordable way to establish a legacy that will allow you to make a powerful contribution to society. The Hendricks County Community Foundation can show you how your gift can make a difference now and for generations to come.

For a free brochure about how to use life insurance to leave your legacy, contact me by e-mailing to deedee@hendrickscountycf.org or by calling 718-1200.

You should consult your insurance, tax, and other professional advisors for the best options and tax results for your particular situation.

Enjoy the rest of the summer! Until next month ...

— Deedee Daniel is executive director of the Hendricks County Community Foundation.

        

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