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-Name The University of Kentucky as Beneficiary of Proceeds . ‘ "i «
-Name The University of Kentucky as Recipient of Dividends '2
-Donate an Existing Life Insurance Policy to The University of Kentucky ‘
°Donate a New Policy to The University of Kentucky ‘
When economic times get tough, finding dollars to donate can get tougher, but
there are ways to make your charitable dollar stretch further. Certainly, many , 7
people find a way to give, no matter the broader economic trends. Art “r Sa om '
Life Insurance
If you can’t give cash now, consider giving your whole or universal life insurance policy to the university. Many times
somebody will have a life insurance policy with a cash value and they no longer need the policy so they will donate the
policy. The university can choose to cash it. In that situation, the donor generally can claim a deduction for their basis in
the policy, usually the amount of the premiums or the university can choose to hold the contract until it matures.
You can apply for a new life insurance policy, or transfer an existing one, making the university the contract owner and
beneficiary. Then, the donor gives an amount equal to the premium to the university each year. University of Kentucky
actually owns the policy and the premium is a tax deductible gift. When making life-insurance-related charitable
decisions, be wary and always consult the development office, a tax professional or your financial advisor.
Consider Phil, a 50-year-old, who decides to give $4,000 a year to his alma mater for the rest of his life. If Phil dies in 10
years, his school would receive only $40,000. But if Phil were to apply for a $250,000 permanent life policy with his
university as the policy owner, he could turn that $4,000 annual contribution into a guaranteed $250,000 deferred
contribution. Furthermore, the policy is not includible in Phil’s estate (50 long as he does not have any incidents of
ownership), and he can potentially deduct the full premium for federal income-tax purposes if he itemizes his return.
Rollover IRA funds
With the passage of the Emergency Economic Stabilization Act of 2008, Congress extended a perk for wealthier older
taxpayers who don’t want to face the tax hit from a required minimum IRA distribution. The tax perk allows taxpayers
70 V2 or older to send up to $100,000 from their IRA to a charity income-tax free; it had expired at the end of 2007, but
the financial rescue plan reinstituted it for 2008 and 2009. Taking advantage of this tax perk is good for your tax bill
now—and after you’re gone. IRA assets, if they end up in your estate, can be very, very heavily taxed; this type of
donation satisfies your required minimum IRA distribution. If that RMD would otherwise trigger a higher tax bracket for
you, then this is really useful. Note: You don’t get the charitable deduction for this rollover.
For additional information please call our office.
SALOMON & CO. Salomon & Co_
800.928.0012
8592550012 For a confidential, no obligation consultation to review
legacyplan@salomonco.com , ,
. a g , 3217 Summit square Place, these and other planning techniques, please contact us.
k \ Ste 250
J. ’A, Lexington, KY 40509
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