Sometimes, our desire to give leads us to make commitments that are difficult to fulfill. Any endeavor worth undertaking, especially one that can benefit others, deserves our careful consideration before we begin. Doing so can yield the greatest results. When contemplating making charitable gifts, consider the following:
· Choose Your Causes. Good causes abound and regularly dem and our attention. Choose a limited number of organizations that concentrate on areas that are important to you, and then research what kind of help they need.
· Budget Your Gifts. When planning your annual budget, include charitable gifts. Spreading your donations over the year can both lessen the impact on your finances and increase the total you may be able to give.
· Plan Your Volunteer Career. Volunteering can be a personally rewarding experience, especially when you can see the fruits of your labor. Carefully determine the time you have available to ensure your best efforts for your cause, and avoid overloading yourself.
· Review Your Plans. Just as you review your annual financial budget, you should review your annual time/value budget. Revise your volunteer commitments to include those where the rewards have been the greatest for both you and your cause.
· Consider a Testamentary Gift. If you are fortunate enough to be in a position to increase the amount you donate, or you are concerned about the future of the organizations you support, consider making a Testamentary gift.
What Is a Testamentary Gift?
Quite simply, a testamentary gift is a promise of funds to be made available from your estate upon your death, typically through your estate. However, using your estate as a conduit can lead to a reduction in your intended gift if any of the following are experienced:
· A decrease in the fair-market value of your assets before your death;
· Unforeseen estate expenses that must be made from your assets; and,
· The elimination of your gift if your will is contested.
You may be able to protect your gift from estate problems through the establishment of a trust; however, the legal and administrative costs associated with doing so may also have an adverse impact on your gift.
Guaranteed Protection for Your Charitable Gift
Your intentions— and your gift—can be protected against many of the factors above through the use of life insurance. The potential leverage of life insurance may result in a larger gift than you had hoped.
In addition, the simplicity of doing so and the satisfaction you will gain will add to the rewards of giving. The policy can be purchased with funds that you contribute to the charity, and as such, they are tax deductible as a charitable gift. The policy can be owned by the charity and removed from your estate, thus protecting your gift from the taxation, creditors, or legal contest to which your estate may be subject. As owner of the policy, the charity can decide whether they want to use your gift to pay the premiums or let the policy lapse. As beneficiary, the charity will receive the proceeds of the policy at your death. Depending on the type of policy purchased and the charity’s willingness to use your contributions to maintain the policy, these proceeds may be guaranteed and may even increase over time. Depending on the performance of the policy and other factors, the proceeds may exceed the amount you would have otherwise given outright during your lifetime or upon your death.
Imagine What You Could Do
Your gift through life insurance could allow you to give far more than you ever thought possible. It could help guarantee funding for your chosen organization and help ensure the continuance of its good works. It could mean that your best intentions become reality. The satisfaction that comes from knowing you have done the most you could will be your final, and well-deserved, reward.
All insurance guarantees are based on the financial strength and claims paying ability of the issuing insurance company.
Neither MetLife nor its representatives offer tax or legal advice. You should consult you own advisors before making any decisions.
Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this article is not intended to ( and cannot) be used by anyone to avoid IRS penalties. This article does not support the promotion and marketing of this life insurance. You should seek advice based on your particular circumstances from an independent tax advisor.
Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.
This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116