Here at Habitat for Humanity of Missoula we believe that estate planning is very important. We would like to encourage everyone in our community to plan ahead by having a will prepared. We also want to encourage everyone to consider how your estate might provide for the needs of your family and the needs of your community. A good source of information for this is the Legacy Montana website. Habitat for Humanity is proud to be a part of this group: http://www.legacymontana.org/home.html
Habitat for Humanity of Missoula has a new tool to build houses! The Board of Directors has approved policies to establish an Endowment Fund for our organization. Leaving a legacy in your will or through a direct donation can benefit our financial outlook. In some cases, planning your giving can let you accomplish the same goals for less.
The principal of your gift is preserved and the interest is used to maintain long term financial stability for our organization allowing Habitat to continue partnering with families in need of decent, affordable housing. If you’re interested in the Fund or have any questions, please call the Habitat for Humanity of Missoula office at 549-8210.
Building a Legacy
Each of our partner families must take a “wills workshop.” This is not something that the working poor in our community usually think much about. Thanks to Habitat supporters and their own “sweat equity,” our partner families are building homes and new lives. As homeowners, these hardworking families will be building equity. For the first time, they will have an inheritance to leave to their family.
We believe that you don’t need to be rich to help others. Habitat partner families don’t get a free home. They work hard. They help build their homes and the homes of other Habitat partner families. After they move in, they make affordable mortgage payments. These payments go to our “Fund for Humanity” and help build more homes with more needy families in the future.
Working together, we’ve made lots of progress in our vision to eliminate poverty housing, but we all know the task won’t be accomplished in our lifetime. That’s why it is so important to make plans that continue beyond our lifetime. How do you feel about this kind of planning? If you would like to plan your estate for the needs of your family and for the needs of your community, we encourage you to contact our office at 549-8210 or firstname.lastname@example.org
A Case for Charity: Use life insurance to benefit a favorite charity. It can benefit you too!
Submitted by Dan Browder
Have you entertained the idea of leaving a sizeable gift to charity after you pass away? Consider using your life insurance policy to support your favorite cause. Here’s how.
1. Name the charity as the beneficiary of your life insurance policy so the death benefit automatically gets paid to them.
Pros: The policy proceeds, while includible in your estate at your death, will qualify for the estate tax charitable deduction to the extent the policy proceeds are paid to a charity.
Cons: While a beneficiary designation is simple, private, and requires little documentation, it is important to understand that because you retain control of the policy you will not be able to take any income tax deductions during your life.
2. Donate your life insurance policy to charity.
Pros: This approach allows you to gain a current charitable deduction as long as you transfer all rights of ownership in the policy to the charity. Where future premiums are required, your payments can be structured to qualify as charitable deductions for income tax purposes. The charity benefits since it has control of cash values and dividend rights, and receives the death benefit free of federal income, gift and estate taxes. Probate and other administrative costs and delays are also avoided.
Cons: As the donor, you lose control of the policy.
3. Help the charity purchase a new policy. Under this approach, the charity names itself as owner and beneficiary and is responsible for making premium payments. Of course, you can assist them in the process by making cash contributions equal to or greater than the needed premium dollars on an annual basis.
Pros: If structured properly, an annual charitable deduction should be available, subject to the general limitations placed on charitable contributions.
Cons: The charity is not obligated to maintain the policy nor are you obligated to continue premium contributions. If this plan is intended to serve as a future endowment, both parties must understand their roles if the plan is to be successfully brought to completion.
4. Gift assets to the charity and replace family wealth through a wealth replacement trust.
Pros: By directing the tax savings generated by your charitable gift to the purchase of a life insurance policy, you can donate your assets to charity and still provide a benefit to your heirs.
Cons: You’ll need to make sure the life insurance is owned by your heirs or by an irrevocable life insurance trust (ILIT) to ensure that the policy proceeds will not be included in your estate at your death and that your heirs will receive the entire death benefit without losing some of it to estate taxes.
Prudential and its licensed financial professionals cannot provide tax or legal advice. To learn more about setting up a charitable donation of life insurance, consult with your attorney or tax advisor. Keep in mind not every charity is interested in a policy donation some prefer an outright cash gift. Be sure to discuss your desires with your charity of choice prior to setting your estate plan in place.