1. Insured Donation Strategies
Presented by Annie Bokova,
M.Sc., CFP, CLU, FMA, FCSI
Estate Planning Specialist
(604)
June, 2015 1

2. Insured donation strategies
Life insurance allows a person of modest means to provide a much larger gift to charity for a relatively small annual cash outlay.
Life insurance allows a person of wealth to provide a much larger gift to charity as a part of an overall wealth management plan.

3. Insured donation strategies
Basic strategies
Strategy 1: Gift existing life insurance policy
Strategy 2: Gift new life insurance policy
Strategy 3: Gift by beneficiary designation
Strategy 4: Insured lifetime gift
Strategy 5: Insured estate replacement

4. So many options!

5. Gift existing life insurance policy
Benefits:
Donor makes a donation today
Donor can offset current taxes
Charity controls the policy
Policy may be self-funding if sufficient cash values
Charity receives total death benefit upon death

6. Gift new life insurance policy
Donor purchases a new life insurance policy and gifts the policy to the charity
Charity becomes the owner and beneficiary
Donor gets a non-refundable tax credit based on future premiums paid into the policy by the donor

7. Gift new life insurance policy
Benefits
Donor makes a donation today
Donor can offset current taxes
Charity controls the policy
Charity has access to cash values
Charity receives total death benefit upon death

8. Gift new life insurance policy
Donor, age 50, buys a $500,000 insurance policy, gifts policy to charity
Annual premium (10 years) $20,000
Tax benefit on premiums $8,700
Death benefit at life expectancy $867,325

9. Gift by beneficiary designation
Donor either owns or purchases a life insurance policy and names charity as the beneficiary
Proceeds paid directly to the charity following death
Donor’s estate gets a non-refundable tax credit based on the total death benefit

10. Gift by beneficiary designation
Benefits
Donor makes a substantial donation following death to offset estate tax liabilities
Donor’s estate obtains tax benefits based on the total death benefit
Donor controls the policy
Charity receives total death benefit upon death

11. Insured lifetime donation
Donor purchases a life annuity and a life insurance policy in an amount equal to the premium for the annuity
Donor donates the annual annuity income less the insurance premiums to charity
Donor’s estate receives the insurance proceeds following death

12. Insured lifetime donation
Benefits
Donor makes a guaranteed lifetime income which can be donated each year to charity (after payment of the insurance premiums)
Donor receives enhanced rate of return
Donor’s estate receives total death benefit

13. Insured estate replacement
Donor gifts property to charity today:
cash,
public company shares,
land, etc.
Donor uses the net tax benefits to purchase a life insurance policy to replenish the estate
Charity receives property with value today and can convert that property to cash today

14. Insured estate replacement
Benefits
Donor makes a substantial donation today and can offset current tax liabilities today
Charity receives substantial donation today
Family receives recognition for the gift today
Donor funds estate replacement insurance using net tax benefits
Donor’s estate receives total death benefit funded by the donation tax benefits

15. Insured donation strategies summary
Strategy
Policy owner
Beneficiary
Donor
Charity 1.
Gift existing policy
Tax benefit today based on CSV and tax benefit each year based on future premiums
Cash deferred until death 2.
Gift new policy
Tax benefit based on future premiums 3.
Insured gift by beneficiary designation
Tax benefit at time of death based on death benefit 4.
Insured lifetime donation
Donor names
Tax benefit each year based on annual donation
Annual cash donations 5.
Insured estate replacement
Tax benefit today based on value of property donated
Cash today

16. But wait…
When should I get insurance?
Can I wait?
Am I medically eligible?
What happens on January 1, 2017?

17. We can help!

18. Thank You!

19. Questions? www.woodgundy.com
CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.