Life insurance can be an incredible blessing for your family, as well as a source of much-needed liquidity for myriad other purposes. Then again, you might just end up not needing it all... or at all. What do you do with the policy?
WealthManagement.com explained the motive and the usefulness of the approach a short time ago in a recent article titled “Donating Life Insurance.”
What if it turns out that you will no longer really need that life insurance policy for which you scrimped to pay premiums over the years? Your children are grown and on their own, plus you have built up enough wealth to carry you and your spouse through retirement.
Perhaps you have forgotten about that old policy sold to you by a college buddy when he was just getting into the business in Overland Park or elsewhere. In short, the policy is “found money” you really do not need now.
Consider this: your favorite charity could make good use of your policy and its eventual proceeds. Charities in the know are far more amenable to such unique gifts than you might realize. Now, instead of the eventual proceeds being a potential tax burden to your estate, you can claim a current charitable deduction.
Two birds with one stone.
Be sure to read the original article for more of the particulars. Then, before taking action, schedule a consultation with your estate planning attorney to make sure you connect all of the dots and get the best benefit while doing the most good.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: WealthManagement.com (March 18, 2014) “Donating Life Insurance”