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A Greater Good: Steps for Maximizing Charitable Giving A Legacy Planning Seminar Sponsored By: Securian Financial Advisors of ND, Inc. 4431 Memorial Highway, Mandan, ND 701-663-8401 / 866-284-8401 Securities and Investment Advisor, services offered through Securian Financial Services, Inc. Member FINRA/SIPC Securian Financial Advisors of ND is independently owned and operated. This Information is a general discussion of the relevant federal tax laws. It is not intended for, not can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advise of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances. Simple Methods of Giving: Outright Gift A bequest through your estate planning Naming your charitable organization as the beneficiary of a life insurance policy or annuity Naming the organization as beneficiary of a qualified retirement plan or IRA Complex Methods of Charitable Giving Charitable Remainder Trusts Charitable Lead Trusts Charitable gift annuity Donating a personal residence or farm Charitable Gifts of Life Insurance Life Insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges. You Want to Make a Meaningful Gift to Your Favorite Charity and Receive a Tax Deduction Incorporating a Life Insurance Policy May Make it Possible to Increase the Size of Your Gift to Charity Life Insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges. Three Possible Ways to Incorporate Life Insurance Into Your Charitable Giving Strategy: 1) gift premiums to your designated charity 2) gift the life insurance death benefit proceeds to your charity 3) gift an existing life insurance policy to charity. Charitable Gift of Life Insurance – Gift of Premiums Donors Cash Gift of Premiums Charity Life Insurance Policy on donor(s) *For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Section 101(a)(1). In certain situations, however, life insurance death benefits may be partially or wholly taxable. Situations include, but are not limited to: the transfer of a life insurance policy for valuable consideration unless the transfer qualifies for an exception under IRC Section 101(a)(2)( i.e. the “transfer- for- value rule”); arrangements that lack an insurable interest based on state law; and an employer-owned policy unless the policy qualifies for an exception under IRC Section 101(j). Charitable Gift of Life Insurance – Naming Charity as Beneficiary Own Donors Life Insurance Policy on donor(s) Death Benefit Proceeds* Charity *For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Section 101(a)(1). In certain situations, however, life insurance death benefits may be partially or wholly taxable. Situations include, but are not limited to: the transfer of a life insurance policy for valuable consideration unless the transfer qualifies for an exception under IRC Section 101(a)(2)( i.e. the “transfer- for- value rule”); arrangements that lack an insurable interest based on state law; and an employer-owned policy unless the policy qualifies for an exception under IRC Section 101(j). Charitable Gift of Life Insurance – Gift an Existing Life Insurance Policy Gift Existing Life Insurance Policy Donors Charity What Do You Get Out of These Arrangements? What Does Your Favorite Charity Get Out of this Arrangement? Common Questions • Are there any limits on the amount of income tax deduction for my gifts of cash or the life insurance policy? Common Questions • Can I pay the premiums directly to the life insurance company? Common Questions • Does the Charity have an insurable interest on my life? • If the Charity is going to purchase the life insurance on my life, how much life insurance can the Charity purchase? 16 of 14 Consider Charitable Gifts of Life Insurance if You… • Want to make a large gift to a charity at a potentially low cost • Receive a tax deduction TR# 632792 DOFU: 4-2013