Using Life Insurance for Impact with Mark Willis
Bob DePasquale, CFP?CAP?
Keynote Speaker | Helping growth-oriented organizations attract top talent and the most loyal customers
F.I.R.E. - Feature, Inspiration, Resources, and Education
Feature:
Mark Willis is a Certified Financial Planner (CFP?) in Saint Charles, Illinois. His firm, Lake Growth Financial Services, focuses on helping those they serve protect and grow their money, keeping your money available for both now and in the future and passing wealth. He is a three-time “#1 Best selling author” and the host of “Not Your Average Financial Podcast”.
Inspiration:
by:?Stacee Jacobs ?CPWA? RMA?, BFA?, Lead Planner at Initiate Impact
Mark grew up not learning about money in school and found himself working diligently to pay off his $120,000 student loan debt after college. He had to work in a position he didn’t enjoy just to make ends meet. This is when he started learning about money.
He felt it was important to get the “universe of money” situated in his head and in his heart. If he knew what was going on with it, he would know what to do.? It wasn’t right do something just because everyone else did. He wanted to focus on what he wanted his money to do. This began his pursuit of the CFP? marks, and the chance to learn about money.
Mark’s mom was diagnosed with cancer when he was in college. She recovered and her cancer went into remission for four years. He watched her experience the financial impact of serious illness along with everything else that goes along with fighting the disease. Ten years later, the cancer came back and ultimately took her life.???
Throughout his life, his mom passed significant values to Mark and shared her wisdom. Being able to articulate those values and then align his resources with them was critical for Mark to be able to accomplish what he wanted in life.
Today, Mark helps those he serves align their values, their priorities, and their money. He often uses life insurance to help meet his clients' needs, wants, and desires both today and in the future.? While this may not be the right strategy for everyone, Mark has been able to help his clients maintain access to their money while growing it for future needs and future generations.? They can utilize it to pay for college, vacation, funding retirement, and for charitable giving before finally passing their wealth to the next generation.
Resources:
Mark Willis - LinkedIn
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Education:
The first recorded life insurance policy dates back to 1583 and has been used to fund and protect the priorities of individuals, families, business owners, and entrepreneurs. ? Most people think of life insurance as a vehicle that will help provide for their loved ones when they pass away.
While this is the most traditional use, life insurance can be issued for multiple reasons. For example, one might have the desire to make a more meaningful impact toward a specific cause than their available resources will allow. In this case, one could consider utilizing the available resources to purchase a life insurance policy to benefit that cause.
There are several ways to structure life insurance to provide a greater gift to the organizations that you care about. The first would be just to name the organization as the beneficiary of the death benefit amount when you pass away. There is, however, little benefit to you by making this election as neither the premiums or the death benefit are tax deductible during your lifetime.?
Your estate may, however, receive a deduction or credit for the death benefit amount as a donation to charity at the time of death. This strategy also allows the owner some flexibility in being able to change the beneficiary should circumstances change and/or they decide to support a different non-profit organization.
The second option is to make the non-profit organization the owner of the policy. This will allow you to deduct the premiums you pay during your lifetime and, if structured correctly, the fair market value of the life insurance policy at death. The disadvantage of this strategy is that there is a loss of flexibility to the donor. The policy and beneficiaries must be irrevocable.
This is where other strategies utilizing life insurance may make more sense.
You may want to consider leaving tax-deferred assets to charity and name your children or loved ones the beneficiary of your life insurance. This can have a substantial impact on the taxability to your heirs.
They receive the life insurance proceeds tax-free and the charity would receive the tax-deferred assets tax-free.? This means that less money goes to pay taxes and your estate can remain intact for future generations.
You can also gift the dividends from your life insurance to charity during your lifetime and receive a tax deduction or credit for those contributions. This provides you with the ability to gift to your heirs at passing but to charity during your lifetime and allows you to maintain flexibility in which organizations you gift to.
While life insurance can enhance your philanthropic planning it is not right for everyone. We recommend that you seek advice for a professional who can evaluate your priorities, preferences, and resources to determine if life insurance makes sense for you in regard to your family and philanthropy.