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Give a Large Gift and Secure Your Heirs Inheritance
A Wealth Replacement Trust provides the opportunity to give the VFW National Home for Children a large gift without taking away from your heirs’ inheritance. This approach allows a donor to replace a gifted asset with life insurance.
Example:
Richard, a 77-year-old in good health and in a 28% tax bracket, donates $1,000,000 to the National Home. The remaining value of his estate is valued at $3,000,000. The National Home purchases a $1,000,000 annuity policy, which generates $100,000 in annual income for the National Home. The National Home uses a portion of the income to purchase a $1,000,000 life insurance policy on Richard. His heirs are the beneficiaries of the life insurance.
When Richard passes away, the income for the National Home will cease and his heirs will receive the $1,000,000 life insurance proceeds. By utilizing special trusts, his heirs will receive significantly more because the life insurance proceeds are exempt from income and estate tax! The National Home has also benefited by receiving a great deal of annual income during Richard’s life.
Richard was able to make a significant gift without reducing the amount passing to his heirs, save on estate and probate taxes and witness his legacy by caring for children at the National Home.
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