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Help your clients build their charitable legacy with donations of life insurance.

By Elizabeth McCray, gift planner

At the Saint Paul & Minnesota Foundation, we understand that you want to help your clients give in extraordinary and fulfilling ways. That is why we accept universal, term and whole life insurance policies as a way for Minnesotans to give back and create a lasting legacy.

Let’s take a look at how this works.

Just this January, we worked with a donor to turn his life insurance policy into a charitable gift to support the needs of his favorite nonprofit. He took out the policy years ago when he had his own business. Eventually, the business dissolved and he no longer needed the policy. He decided to donate his policy to the nonprofit where he volunteers and serves as treasurer.

To donate the policy to the organization, he named the organization as the beneficiary. The organization has a nonprofit endowment fund with the Saint Paul & Minnesota Foundation, and the death benefit will go to that fund when he passes.

We also worked with professional advisors and their clients on gifts of life insurance. In a similar situation, an advisor referred a donor to the Foundation who serves on the board of a local nonprofit. His fellow board members were planning future gifts, and his advisor suggested he consider donating his life insurance policy.

In this case, we became the beneficiary or owner of the life insurance policy, and when the donor passes, his beloved nonprofit organization will receive the funds from the policy via an endowment it has set up with the Foundation.

Other Ways to Use a Gift of Life Insurance

In the scenarios above, donors donated their universal life insurance policies directly to their favorite nonprofits’ endowment funds. Gifts of life insurance can also be made to a donor advised fund (DAF). A DAF is a flexible charitable giving tool that allows your clients to give to causes they care about, while we take care of the accounting, legal and investment responsibilities.

If a donor already has a DAF, gifts of life insurance can be a great way to grow their fund. By donating a life insurance policy to a DAF, your clients can support multiple nonprofits with the same gift. Naming the DAF as the beneficiary allows them to retain ownership during their lifetime.

A gift of life insurance is just one example of a non-cash asset that can be used to support your clients’ charitable goals.

Interested in learning how your clients can use a gift of life insurance to support the causes they care about? Contact me or one of our other experienced gift planners today.

The Saint Paul & Minnesota Foundation does not provide tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors regarding your individual situation before engaging in any transaction.

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