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Leaving a Legacy

Charitable gift of life insurance might be the answer

Tim and Ann Wiersum have made giving to the Lord's work a priority throughout their 43 years of marriage.

As they approached retirement, they realized two things. First, they had done a great job saving money and planning. Second, they wanted to leave a legacy by making concrete plans to support Emmaus Campus Ministry at the University of Montana and Flathead Lutheran Bible Camp in Montana's Rocky Mountains. They had some savings in an individual retirement account (IRA), and wondered if they should just take money out and donate it.

But their Thrivent Financial representative, James Stauffer in Missoula, Montana, suggested another way that they could make their gift even bigger and last longer: using the money from IRA withdrawals (known as distributions) to buy a whole life insurance contract.

The Wiersums would gift the contract to the InFaith Community Foundation (Link opens in new window) (formerly the Lutheran Community Foundation), naming it as the contract's beneficiary. The Foundation will invest the money from the life insurance after their deaths, allowing it to potentially grow in value for many years. The Foundation also will make annual payments to the Wiersums' two designated charities.

It's fitting that this gift will expand over time, since that's something the Wiersums like about their charities and the impact they have on the faith lives of young adults. "[With these two organizations], we see a steady trickle of kids who become seminary students and go on into the ministry," says Tim.

The Wiersums will use annual withdrawals from their IRA to pay the premium on the life insurance contract. They owe tax on those withdrawals, but the money used to pay the life insurance premium counts as a charitable contribution deduction on the couple's federal income tax return in the year they are paid (since it's going to a not-for-profit foundation).

While the charities won't get the money until the Wiersums die, they know the gift is coming, which helps them to plan. And the Wiersums have the joy of knowing their gift will help young people for many years.

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