Life Insurance: Designating SABA as the beneficiary, in whole or in part, of the proceeds of your life insurance policy is the simplest way to make a deferred contribution. SABA may be named as the primary beneficiary or added as a secondary or contingent beneficiary of an existing life insurance or annuity policy. Life insurance policies can also be a means of ensuring a sizeable gift to SABA after your death or reimbursing your heirs for contributions made to SABA during your lifetime. If ownership of the policy has been irrevocably assigned to SABA, you may claim a current tax deduction for the cash value of a paid policy and/or continuing premium payments made on a policy that designates SABA as the sole beneficiary.
Example: Dr. Martin intends to establish a SABA endowment fund in honor of her parents. She takes out a $100,000 insurance policy on her life, naming SABA as the beneficiary. Dr. Martin continues to pay the premiums on this policy but may not claim a current deduction for those payments unless she actually assigns ownership of the policy to SABA.
Retirement Funds: Designating SABA as the beneficiary of residual amounts in your IRA account, 401K, or other retirement plan funds will exempt those remaining assets from estate taxes. Since such funds, delivered in a lump sum, may impose serious income tax burdens on your heirs, designating a charitable beneficiary may be a wiser choice.
Royalties: SABA may be designated as the beneficiary of posthumous royalty payments.
Example: On average, Dr. Fields earns $1,500 per year in royalties on the sale of his textbook. He may have those royalties paid directly to SABA after his death.
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