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You're considering a gift made after your death > You prefer to make a gift from income instead of principal
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You may be surprised to learn that your surplus,
paid-up life insurance policies can be used to fund a gift through
the Foundation. If, for instance, you acquired several life insurance
policies when your family was younger, with the children now grown
the coverage may be more than you need. If you donate a policy,
your charitable deduction will be the lesser of the fair market
value of the policy – we can guide you in determining this
– or your cost basis, which is the total of your net premium
payments.
Alternately, your annual income may be healthy,
but you know that ongoing family obligations will make it difficult
for you to accumulate capital. You want to establish a significant
endowment fund through the Foundation, but wonder how you will gather
the resources to do so. If you take out a new life insurance policy
as a gift, you can deliver a large benefit to one or more Baptist
causes from income rather than capital. You will make deductible
annual gifts to us in the amount of the premium payments; we will,
in turn, pay the premiums to the insurer.
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F.Y.I.:
- It is important that you also name the
Kentucky Baptist Foundation as the irrevocable owner of
the policy and not just the beneficiary. The IRS does not
allow deductions for your premium payments if you retain
ownership of the policy.
- If you have borrowed against a life insurance policy, a subsequent gift of the policy will create taxable income for you -- the difference between the loan balance and the fair market value of the policy.
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You can also transfer ownership of an existing
policy which is not yet paid up. Your charitable deduction will
be determined in the same way as if you had given us a paid-up policy.
We reserve the right to surrender your policy or to keep it in force;
you can make deductible gifts to offset premium payments if we elect
to continue the policy.
Email us, complete the
personal illustration form, or call
us at 502-489-3533 so that we can assist you through every step
of the process.
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