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Wealth Replacement

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Glossary

Under certain circumstances, a life insurance policy may “replace” for heirs the value of a gift made to Clarkson. The proceeds from an income tax charitable deduction, often combined with increased income as the result of funding a gift-with-income plan, are used to pay premiums or make a one-time payment on a life insurance policy at least equal in value to the amount of the gift to Clarkson. Children or other heirs are named beneficiaries of the policy. In this way the donor “replaces” the “wealth” that was gifted to Clarkson.  Placing this insurance policy into a trust (a so-called wealth replacement trust) preserves the value for your heirs, avoids probate and may transfer the value free of federal estate tax and state inheritance tax.

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This web page does not provide legal or financial advice, nor is it a comprehensive review of the topic. You should consult your legal and financial advisors and Clarkson University before making or planning your gift. (3/2014)