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Option 1: Donor Owned Policy
For maximum flexibility, you can own the policy and name the charity as
beneficiary. An advantage is that you retain complete control of the
policy. A disadvantage is that premiums are ineligible for tax credit and
that the death benefit may exceed the charitable donation limits.
Option 2: Charity Owned
Policy
To get annual tax credits for the premiums, you could establish the charity
as the owner and beneficiary of the policy. You pay the premiums to the
insurer and the charity issues a charitable receipt for the amount paid.
Please Note: Care must be
taken to ensure that the gift falls within the limits prescribed by the
Income Tax Act. Individuals can donate up to 75% of their net income in any
year and 100% of net income in the year of death and the year prior to
death.
Seek professional advice
If the idea of a charitable life insurance policy is of
interest to you, please contact me for assistance in designing a plan to fit
your circumstances. Also check with your tax advisor regarding the tax
benefits.
To discuss further, please
contact
Angela Knight van Schaayk |
