St. Lawrence University: Manley Society

Definition
Creating a deferred gift by naming St. Lawrence owner and/or beneficiary on any of a number of commercially available term, whole life or universal life insurance products.

In most cases, donors use an existing, paid-up policy to create a life insurance gift. It may be a policy from childhood, or a policy to pay college expenses for the kids, or to protect a developing business interest. It may simply be a policy that is no longer needed due to evolving personal circumstances.

Donors may also use an existing policy that has premium payments due for some period of time into the future. The donor elects to continue making premium payments on the policy. In some cases, a donor may create a new policy designed to meet her/his philanthropic and financial planning goals and make premium payments on the policy.

In all cases, the donor may elect to name St. Lawrence as owner and/or beneficiary of the policy. Naming St. Lawrence beneficiary of a policy is a revocable decision. Depending on the insurance product, the university may be named as a primary, partial or contingent beneficiary. Naming St. Lawrence owner and beneficiary is an irrevocable decision, and may generate some level of income tax charitable deduction.

Another option for using life insurance is to name the university on a policy from an employer or a group life situation. The university may remain a beneficiary as long as the policy is in force.

In some cases, a donor may make or plan a gift to St. Lawrence other than life insurance, and then create a life insurance policy to “replace” that wealth for heirs. In this instance, other heirs are named beneficiaries of the policy. See Wealth Replacement.

Naming St. Lawrence as beneficiary of a policy is a revocable decision, so no current income tax charitable deduction is allowed. If St. Lawrence is named owner/beneficiary of a policy, the donor may be eligible for an income tax charitable deduction equal to roughly the cash value of the policy. If structured correctly, the donor may also be able to claim an income tax charitable deduction for future premium payments paid on a policy where St. Lawrence is named the owner.

To claim an income tax charitable deduction, however, it is important to understand that St. Lawrence must have all rights of ownership over the policy, including the right to hold or cash in the policy, and the right to make or terminate premium payments. Otherwise, the government does not allow the donor to claim a charitable deduction.

Gifts of life insurance over $5,000 must have a “qualified, independent appraisal” if the donor wishes to declare an income tax charitable deduction.

There may be tax and gift complications on a policy with outstanding loans when St. Lawrence is named the owner/beneficiary. You should consult your advisors before creating this type of plan.

At such time as a policy matures, the policy value is removed from the value of the estate. Some donors prefer a life insurance gift because the proceeds from the policy will pass outside of the probate process directly from the insurance company to St. Lawrence.

While every gift situation is unique, there are several steps that may be outlined to help clarify the process.

You decide. Philanthropy is a lifelong process. At some point you may wish to express your thanks to St. Lawrence and help ensure a St. Lawrence education for future Laurentians, and decide that a gift of life insurance is the way to begin.
You talk. You may wish to meet with your financial and legal advisors to discuss options and determine if a gift of life insurance is right for you.
We talk. You may wish to speak with the planned giving office to make sure that your wishes can be accomplished at St. Lawrence, and to create the necessary documentation so that those who come after us can fulfill your intentions.
You sign. You make a final review and sign the appropriate legal documents with your council, and maybe the planned giving office, creating or modifying your gift plan.
You relax. You have just connected yourself with the past and the future as you continue the good work of those who came before you, and you prepare the way for those who will come after you. Enjoy the moment!

If you are a new member of the Manley Society, you will receive letters of welcome.
As a Manley Society member, you will receive the society annual report each year, and an invitation to the annual meeting held during reunion each June.
You will be recognized as a member in the university annual Report of Appreciation as a way for us to say “thank you” and encourage others to plan for St. Lawrence as well.