Life Insurance Gifts

There are three primary ways to use life insurance policies to make a planned gift, each of which has its associated tax benefits. By transferring ownership of a paid-up policy to Drayton Hall and naming Drayton Hall as your beneficiary, you can receive a federal income tax deduction equal to the lesser of the cash value or the total of the premiums paid. If you would prefer to make a planned gift but retain ownership of the policy, you may be eligible for an estate tax deduction (though not an income tax deduction) if you name Drayton Hall as a beneficiary.

Another way to use life insurance policies to make a planned gift — and the most popular way to do so in recent years — is to use life insurance as a means of wealth replacement for your heirs. In this case, you might choose to donate an appreciated asset to Drayton Hall — perhaps a piece of real estate or stock — because you can realize greater tax savings than by leaving the same gift to your heirs. Then with the amount you save in income taxes, you may be eligible to purchase life insurance with death benefits that equal the value of the gift you made to Drayton Hall. In that way, you provide for your family and for Drayton Hall.