Most people have life insurance coverage to meet the needs that we all can face. But life insurance is often overlooked as a way to make a substantial gift for a relatively modest annual premium.
A donor can name the Proteus Syndrome Foundation as the primary beneficiary of a life insurance policy. The donor retains ownership of the policy, with access to the cash surrender value. At the donor’s death, the face value of the policy will be included in the donor’s gross estate. However, if the decedent had directed that the Proteus Syndrome Foundation receives the life insurance proceeds, the estate will incur a deduction from the gross estate. A donor can also name the Proteus Syndrome Foundation as a secondary beneficiary to receive the proceeds should the primary beneficiary predecease the owner.
A donor may receive more immediate tax benefits for an irrevocable assignment of proceeds or gift of a life insurance policy to the Proteus Syndrome Foundation. Upon the completion of the assignment or gift, the donor is permitted an immediate federal income-tax deduction for the lesser of either the policy’s fair-marked value, or the net premiums paid. In order to obtain an income-tax charitable deduction, the donor cannot retain any rights of the policy. If the descendent had directed that the PSF receive the life insurance proceeds.
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