RenPSG | Blog

Which Life Insurance Policies are Suitable for Charitable Giving?

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This is Part 2 of a 3-Part series on Charitable Gifts of Life Insurance. (Catch-up with Part 1).  In this post, we will focus on policy suitability and claiming the charitable deduction and then wrap up with a Case Study. Part 3 will describe a client who gave an existing policy and a client who gave cash to a charity, which then purchased a new life insurance policy.

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For Love of the Hyphen…

shutterstock_275179937The winds of change blow constantly across the philanthropic landscape.  Legislation, donor transparency, even social media, have swept through the industry at different times to shake-up the status quo.  Here at Renaissance we decided it was time to kick-up a little dust for a cause we strongly believe is not getting the attention it deserves: the hyphen.

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What is a DAF?


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According to National Philanthropic Trust’s 2014 Donor-Advised Fund Report, in 2013 there were approximately 217,367 donor-advised fund (DAF) accounts in the United States valued at more than $53.74 billion. In contrast, in 2007 there were approximately 161,941 DAF accounts valued at more than $31.97 billion, an increase of 34.2% in new DAF accounts and 68.1% in assets.
Donors use DAFs because they are simple to create, highly flexible, and provide superior income tax charitable deductions when compared to private foundations. The benefits of using a DAF include:
    • DAFs are easy to create (most DAFs are created by completing a brief application);
    • DAFs are flexible;
    • Most organizations that sponsor DAF programs accept contributions of not only cash, but also marketable securities and may accept real property and closely-held business interests;
    • Many DAF programs offer an array of investment options and support a variety of grantmaking approaches;
    • Unlike grants from private foundations, grants from a DAF can be truly anonymous;
    • Donors frequently contribute appreciated assets because they are allowed a deduction for the full value of the gift while avoiding recognizing the capital gain when the Sponsor sells the contributed assets; and
    • A gift to a DAF is a gift to a public charity, which qualifies for maximum deductibility.

Using a CRT to Sell a Business: Part 2

Suitability Key to Utilizing a CRT to Sell a Business

brass-keyIn Part 1 of this two-part series, we met a business owner confronted with the need to reduce the tax bite arising from implementing an exit strategy from his family business. We introduced a CRT as a component of an overall strategy to avoid capital gains and net investment income tax, create a significant income tax deduction, provide the business owner with income for life, and fund a significant charitable gift at death. In Part 2, we will discuss four suitability considerations in creating a CRT and explore ways to avoid the two most common hazards encountered when using a CRT to sell a business.

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