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Life insurance is a financial planning tool to help replace income if a bread winner dies while supporting a family or other financial need. There may come a time when the insurance coverage is no longer needed. Rather than cashing the policy in, consider donating the policy to First Baptist Church Arnold.
- The cash value could be used to support various ministries.
- The death benefit may be preserved for future needs.
In addition, most of us realize that a life insurance policy can instantly create a substantial amount of money available from a proportionately small premium; making its use a logical source for a charitable donation.
How it works is simple. By taking a small portion of what you already contribute above your tithe, you can create a substantial future gift.
- You can still maintain your tax deduction!
- Your amount given to church does not have to increase!
It can be one of the simplest forms of giving while offering you an opportunity to make a sizable contribution.
Many people have retirement accounts with significant balances. In some cases, these assets total more than is needed for a comfortable retirement, and could give rise to heavy estate taxes.
In that case, it may be wise to consider using these funds to make charitable gifts now or in the future. A simple change of beneficiary form may be all that is required for gifts of what remains in your accounts. As in the case of gifts through wills and revocable living trusts, such gifts can be arranged to take place only if loved ones predecease you, or in the event of other circumstances you specify.
The single most valuable asset many persons own is their home. Have you ever considered using your home to fulfill the desire to make a charitable gift? Did you know there is a way to give your house while continuing to live there as always?
Using what is known as a life estate arrangement, you make a gift of your home or other appropriate property now while retaining the security of knowing you may live there as long as you wish. You enjoy the full rights and responsibilities of ownership.
Because you will make a gift of the property at your death, you receive a charitable income tax deduction for part of the value of the property immediately.
You continue to maintain the property, pay the taxes, and even receive any income it generates. But because you have provided for the future disposition of the property during your lifetime, it does not pass through your probate estate at death, possibly saving unnecessary expenses and avoiding delays. The property may also not be part of your estate for federal tax purposes, resulting in what may be significant tax savings for your heirs.
Appreciated Stock or Real Estate
When you consider a charitable gift, look at your assets (such as stock or land) that have appreciated over the years. With a gift of appreciated assets, you avoid capital gains tax. This can be an important financial benefit for many donors.
Giving rather than selling your appreciated assets puts you in control of distributing your property. You choose who will receive it, rather than sacrificing much of its value to capital gains tax. Such a gift can also make you eligible for an income tax deduction.
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