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Donating Your Life Insurance Those who wish to make a donation to St. Thomas University through a relatively modest annual payment may do so through their life insurance policy. This method allows the donor to benefit from significant tax savings. Donating through your life insurance policy works in the following two ways: You can transfer ownership of an existing policy to the University – making St. Thomas University the beneficiary of the policy. This gives the donor an immediate tax break. If the donation is a permanent life insurance policy with accumulated cash, the University will issue a tax receipt in the amount of the cash surrender value of the policy at the date of transfer, which would offset tax arising on the transfer. We would also issue a receipt for any premiums paid by you following the transfer. Or you may prefer to retain the ownership of the life insurance policy and donate the insurance proceeds that are paid on death to the University. When a donor designates a charity as the beneficiary of the insurance proceeds directly in the policy itself, the donation tax credit is available to offset the donor’s taxes that arise on death. Similar provisions are in place for the direct designation of charities as beneficiaries of RRSPs and RRIFs. The current legislation provides that the proceeds of the insurance policy are not included in the deceased donor’s estate for probate purposes, or available to most creditors of the estate. The proceeds go directly to the charity; distribution is not held up by estate litigation. By not including the donation in a will, which becomes a public document once probated, you can remain anonymous. If you have any questions about giving through insurance please contact Bob Edgett, Director of University Advancement at (506) 452-0512. |
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