As a financial advisor I am privileged to work with many wonderful and generous people who want to leave a legacy – to leave money behind which will continue to accomplish the good works the donor did during his or her lifetime.

Often we see or hear the names of prominent donors – sponsors of a university building or underwriters of NPR News – and think, Well, yes; I’d love to endow this or that organization or charity, but I’m simply not in that league.

You may be selling yourself short.  One of the best ways to leave a legacy is with life insurance.  For a manageable annual premium, you may be able to leave hundreds of thousands of dollars to your favorite organization.  It works like this:

1. Decide which non-profit you’d like to see flourish. Typically, this is a 501(c)(3) organization such as a church, an alma mater, a hospital, or a charity.
2. You work with the development officer or planned giving department of the non-profit organization to accept your gift of life insurance. Typically, the charitable foundation itself will apply for a policy on your life, and be the owner and the beneficiary of the policy.  You, the donor, are of course the insured.  You don’t make premium payments – you make tax-deductible gifts to the charitable foundation, which in turn makes the premium payments.
3. If there is a specific objective for the funds, or if you desire a certain department to receive the funds at your death, make sure to get this in writing. The receiving organization may have a gift agreement which is mutually signed, and which codifies your wishes.

My business partner, at just 31 years of age, made a $100,000 gift to the Honors College at Florida International University – his alma mater.  He structured the gift in such a way that he will make annual premium payments of $1500 for about fifteen years.  At his mortality age (about 90), and assuming historical returns, the policy death benefit will have risen to $1 million dollars!

Jonathan says, Life insurance is an excellent way for younger people to give back.  It’s a vehicle many start thinking about later in life.  Yet, assuming good health, opening a policy in your early years is a cost-effective way to give substantially.  I love that I am not only able to return to a community that opened doors for me, personally and professionally, but that my gifts of time and money go a long way.

Read more about Jonathan’s gift to the FIU Honors College here.

The point:  don’t let money keep you from making a planned gift and establishing the legacy you’d like!  Policies can be issued, generally, for as little as $25,000.  Work with the planned giving officer of the organization you’d like to support.  Where there’s a will, there’s probably a way.

 

About the Author

Glenn J. Downing, MBA, CFP® is a principal at CameronDowning, a Registered Investment Advisory firm in Coral Gables, FL.