Giving a life insurance policy is one way to maximize your contribution to Groves Hospital Foundation. It enables you to make a significant, lasting gift with a minimal outlay of current savings or income. A gift of life insurance is a deferred gift, which means the proceeds from a gift made now will be realized in the future. Advantages of Gifts of Life Insurance • Allows you to make a larger donation than you would have thought you could afford, at relatively little cost • Does not reduce the value of your estate • Proceeds are paid directly to Groves and are not subject to probate and other estate fees • Can provide an annual tax credit or a tax credit in the year of death based on how your gift is structured. If you retain ownership of the policy the estate will receive the tax credit when the gift is realized. If Groves is owner and beneficiary, you the donor receive immediate tax savings. In these instances, the gift is irrevocable. Some Options Transfer an old policy • You can transfer ownership of a policy to Groves and get a charitable receipt for the full cash value of the policy. The receipt can be used in one lump sum, or spread out over five years, depending on your circumstances. • You can name Groves as beneficiary of the policy. In this way you can remain anonymous and still have access to the money if you need it. While neither method yields any tax credit during a donor’s lifetime, they both enable the estate to claim a credit on the final tax return after the donor’s death. • You may have a life insurance policy from your employer or former employer that you want to donate to Groves. Since you will not be able to change the ownership, you would make Groves the beneficiary of the policy. As above, a donations tax credit will be available when the death benefit proceeds from the policy are paid directly to Groves. • You can name your estate as the beneficiary of the policy and make a bequest for the amount of the policy to Groves. You have flexibility, retain access to the money in case you need it and still get a receipt through your estate for the bequest. The disadvantage of this alternative is that the proceeds would be subject to probate. Buy a new policy Buying a new policy can also give you great flexibility and control over your gift depending on your circumstances. • You can purchase a new policy, and transfer ownership to Groves right away. Retired individuals who have some annual discretionary income can support Groves without depleting their financial reserves or reducing the projected inheritances of family members. Greater leverage is possible when two donors, usually wife and husband, purchase a joint policy. At the donor’s death, the foundation will receive the full face amount of the policy. Meanwhile, donation receipts will be issued for the premiums paid to provide you with annual tax relief, reducing the actual cost of the gift, and allow Groves to plan for its future. • You can name your estate as the beneficiary of the policy and make a bequest for the value of the policy. In this way you retain the flexibility to change the beneficiary and still get a receipt through your estate. • An insurance policy is a good way to provide “wealth replacement” when you donate an asset you might otherwise leave to your heirs. Wealth replacement insurance is not complicated and it could allow you to make a large charitable gift now without affecting the legacy you want to leave to your children. When you make your donation to Groves, you receive a tax receipt for the amount you donated. Let us help you -- and let us thank you! Each and every situation is unique. In order to properly analyze and asses your own situation, be sure to have a professional(s) involved that is well versed in Charitable Gift Planning and the aspects of estate planning. You will be pleasantly surprised to realize that you don’t need great wealth to become a great philanthropist and to make your community a better place! A representative from Groves Hospital Foundation will be happy to meet with you and, if you wish, with your legal and financial advisors, to discuss your goals and work on the wording of your bequest. When you have completed your gift and with your permission, we'll list your name among the growing number of people who have made future gifts to the Groves Hospital Foundation. Hopefully, others will be encouraged to do likewise. |
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