Home of the Innocents

When most people think of making a gift to charity, they picture themselves sitting down at their desks and writing a check or maybe transferring highly appreciated stock. However, the best asset to give to charity may not be cash or stock, but may be your insurance policy. Consider the advantages:

Life insurance gifts are simple; just ask the insurance company for the appropriate forms to make Home of the Innocents owner or beneficiary of a policy. Gifts of a policy are tax deductible, as are future premium payments. A gift of life insurance is certain. The full proceeds are payable to ensure your charitable dreams are fulfilled. Life insurance is paid promptly; it is not tied up in the administration of the estate. Unlike a will, life insurance is not a matter of public record. Your gift to Home of the Innocents can pass in privacy, if you desire.
Life insurance can be used to make a significant gift to Home of the Innocents with exceptional tax advantages.

Types of Life Insurance Gifts

A Gift of an "Unneeded" Policy -- Suppose your family is grown and no longer needs a policy purchased many years ago. You could make Home of the Innocents the owner and beneficiary of that insurance policy and take a tax deduction for the value of the policy at the time of the gift.Let's assume further that you have a $50,000 policy on which you are still paying, and the cash surrender value of your policy is $20,000 and the premiums cost $500 annually. If you contribute the policy to Home of the Innocents and continue paying the premiums, you will be entitled to an income tax charitable deduction of about $20,000, reducing your taxes by $6,200 if you are in a 31% tax bracket. In addition, each year you will be entitled to another $500 deduction for the annual premiums you pay, saving $155 in income taxes. At your death, the full $50,000 proceeds will be used by the Home of the Innocents to help children.You may prefer for Home of the Innocents to continue making the premium payments, or to sell the policy and use the proceeds immediately so that you can see your charitable dreams comes true.

"Wealth Replacement" Plans — Donors who employ various types of charitable trusts can purchase life insurance payable to family members, funded partly by tax savings from their charitable deductions. The life insurance replaces the assets that are received by the charity, and if you employ a so-called irrevocable life insurance trust, your family can receive the insurance proceeds free of gift or estate tax.

Revocable Beneficiary Designation — You can keep lifetime ownership rights in a policy (the right to borrow against or cash in a life insurance policy, for example) and still name Home of the Innocents or another charitable organization as the beneficiary of part or all of the proceeds. Your estate will be entitled to a charitable deduction for the amount passing to us. If you prefer, you can name Home of the Innocents as contingent beneficiary of a life insurance policy. The Home would receive the proceeds only if your primary beneficiary died before you.

Gifts of a New Policy — It may also be possible to make an important gift to Home of the Innocents with the purchase of a new policy on your life. Some plans even provide a mechanism for providing insurance for you and a potential gift to the Home with the payment of premiums by a third party.

The Home of the Innocents, Inc. does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Lisa Cobb, Major Gifts and Planned Giving Manager, at 502.596.1021 or email us for more information.