Life Insurance
An important but frequently overlooked role of life insurance is the one it can play in charitable gift planning. Life insurance itself can be the direct funding medium of a gift, permitting the donor to make a substantial gift (face value of policy) for a relatively modest annual outlay (i.e., the premium payment).
Life insurance can also be used to replace an asset that has been given to Georgia Tech. How it works: After a donor makes a gift to Georgia Tech, the tax savings produced by the charitable deduction are used by his or her children or an irrevocable trust to purchase and pay the premiums on a life insurance policy on the donor's life. Such an arrangement can ensure that the interests of family beneficiaries will not be adversely affected.
Please note: The federal estate tax is currently back in effect through the end of 2012. The top tax rate is now 35%, and the exclusion amount is $5,120,000 per person and $10,240,000 per married couple. Any exclusion amount not used by a spouse who dies after December 31, 2010, is portable and generally may be used by the surviving spouse. It is very important that you seek the advice of your estate-planning attorney to determine what changes, if any, need to be made to your existing estate plans.