Steven Camele understands why many people are hesitant to tackle estate planning. We’d much rather think about our plans for life than dwell on what the world will look like after we’re gone. But avoiding planning doesn’t stop the inevitable from coming, and talking with your loved-ones and your advisor ensures that your wishes and your loved ones are taken care of after you’re gone.
“It’s my job to ask questions, broaden the conversation, and find out what’s important to you,” says Camele, an insurance planner at G&F Financial. “When estate planning, many people think about tax strategies and the money they’re leaving to family, but they forget about contributing to charity. If it’s something they care about, we can create a plan that encompasses all of their passions.”
Giving to charity through the gift of life insurance
One of Camele’s clients is in her 80s. She’s spent her retirement donating her time to a charity she cares deeply about, so Camele suggested incorporating that charity into her estate plan to donate money after she’s gone.
“Most of us donate to charity when asked — when your child or co-worker is doing a fundraiser — but when you’re purposeful with planning, your donation can have a bigger impact. It’s more beneficial for the charity, and for you,” Camele says.
Adding a charity as a beneficiary of an existing or new life insurance policy is a great option for many.
- The proceeds from a life insurance policy can be larger than a simple cash donation. A 60 year old couple putting $500 aside each month for charity can either put that money into an investment or towards premiums for an insurance policy. After 20 years, the charity will receive 41 per cent more from the insurance policy than from the average investment.
- Simple, fast, confidential. Settling a Will can take years, and details become public knowledge. If you name a charity as beneficiary on a life insurance policy, it’s processed in a few weeks and details can be kept completely private.
Another option is to take out a new policy in the name of the charity or transfer ownership of an existing policy to a charity. Premiums can then be tax deductible, or your executor can apply the lump sum of your donation to estate taxes to ensure more of your wealth goes to the people you love.
“If you’re interested in adding a charity as a beneficiary to a life insurance policy or taking out a policy in the name of a charity, it’s essential that the donor, the charity and the advisor work together. Not all charities may be able to accept this kind of donation — so first check that the charity is equipped to handle the documentation and long-term scope,” Camele says. “The important thing is to give it consideration, and then start the conversation with your advisor.”
Include the Langley Memorial Hospital Foundation in your Will
Talk to your financial advisor about donating a gift of life insurance as part of your estate plan.
To learn more about estate planning, join a free virtual estate planning seminar on Thursday, October 7, hosted by Langley Memorial Hospital Foundation.