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Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
Let’s say you are a closely held business owner who sold your business at the height of the market. As a result of your good fortune, you feel an obligation to give back to those organizations that helped make you successful. Your spouse is also very active with volunteer efforts.
You want to make a donation to your alma mater either in the form of real estate or cash. Among your assets is a highly appreciated piece of real estate. You know your alma mater would love to have that land, so you are considering gifting it to the university. You’re aware of the potential estate and tax planning benefits but you’re concerned that this asset will no longer be available to your children. For this reason, you are also considering donating cash to the university instead of real estate. You’ve always wanted your children to have as much as possible to make their lives easier, so you are deciding what the best option is. Below are two donation options to consider.
As you are deciding which donation option to choose, looking into term life insurance with a charitable rider can be a great option. In addition to the death benefit, some insurance companies offer a donation component of 1% of the policy face amount (up to $100,0000) to the policy holder’s charity of choice. While the donation is not gifted until you pass away, it is a great way to ensure that you can give back to the charities you hold dear in your heart.
Here are some potential advantages of the built-in benefit rider for charity:
Before making a donation, you should consider creating the WRT with the help of your attorney and financial representative. Using excess cash flow from other income sources or using other sources of funds, the trust purchases a life insurance policy insuring either you, your spouse or both depending upon how the WRT is structured. Upon your death or the death of your spouse, the insurance proceeds will be paid to the trust and “replace” the assets that went to charity. The trust will use the insurance proceeds for your children’s benefit depending upon the terms of the trust as dictated by you or your spouse.
Here are some of the potential advantages to implementing a WRT:
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2020-106819 Exp. 08/22
Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.