A planned gift of annual dividends paid on a life insurance policy or an out right gift of a policy that may have served its purpose make wonderful gifts for a charitable organization. For many families assets accumulated over time means their life insurance is no longer really needed. For another family, when the mortgage is paid off, mortgage insurance is no longer necessary. When a business is sold life insurance no longer serves its original purpose.
An example of life insurance used for charitable purposes: Mr. and Mrs. Eck had a $100.000 ordinary life insurance policy on which they were paying annual premiums of $4,000. It was purchased originally for the education of their son. Unfortunately, the son passed away as a youth and the insurance was never used for its original purpose. The Eck’s wanted to remember their son and arranged for the transfer of the policy to the little league organization of which he had been a member and loved so dearly. Certain tax benefits accrue to the Ecks, but the ball clubs benefit from the gift. Advice of tax counsel helped them understand the benefits.
If you might have an interest in benefiting the Calumet Theatre by donating an insurance policy, advice of professional tax counsel is recommended.