GUIDE TO MAKING GIFTS OF THRIVENT LIFE INSURANCE
Follow these steps to create a donor advised fund using Thrivent Life Insurance. For help choosing a product, see Giving Life Insurance through InFaith Community Foundation.
Creating the Donor Advised Fund
- The donor completes and submits the Fund Workbook. The Fund Workbook is the donor’s opportunity to tell the Foundation what charities are to benefit from the proceeds of the life insurance gift. Please include a copy of the in-force illustration, if possible. Donors can change their charitable recommendations throughout their lifetimes. See the 'Give Now. Give Later. Give & Receive.' brochure for the types of donor advised funds available.
- Based on information provided in the Fund Workbook, the Foundation drafts a Fund Agreement and sends it to the donor. The FR receives a copy of the Fund Agreement.
- The donor signs the Fund Agreement and returns it to the Foundation.
The Application Process
- Complete the application with the insured as the owner and InFaith Community Foundation as beneficiary. The Foundation will own the policy through absolute assignment.
- Submit the first premium with the application to Thrivent.
- Complete the absolute assignment form, changing ownership from the insured to InFaith Community Foundation. This completed, signed form can be sent to Thrivent along with the first premium and application.
- The Foundatin's Tax ID number is: 41-1802412; date of incorporation is Dec. 22, 1994.
- The contract owner should sign the absolute assignment form in the presence of an impartial witness or Notary Public.
- The life insurance application, initial premium and absolute assignment form should be sent directly to Thrivent Financial.
- Mail the Fund Workbook to:
InFaith Community Foundation
625 Fourth Avenue South, Suite 1500
Minneapolis, Minnesota 55415
- Deliver the insurance contract to the insured.
- Can the Foundation pay out the entire death benefit to my recommended charities?
While the Foundation offers options that allow for immediate payouts to charities, most of its donor advised funds are designed to provide ongoing support to recommended charities on a permanent basis. The Foundation begins distributing annual grants of 5% to the donor’s recommended charities following the year the gift was made. If the donor would like charities to receive a larger percentage of the fund for fewer years, there is an option that allows a maximum of 10% of the fund to be distributed for a maximum of 20 years. At the end of the stated time period, the remainder of the fund goes to the InFaith Community Fund.
Donors can also request the Foundation distribute a portion of the death benefit to the charities at the death of the insured. The greater of $50,000 or 20% of the death benefit must remain in the donor’s perpetual donor advised fund for the benefit of the donor’s charities. For more information on how charities can benefit, view page 8 of the Fund Workbook.
- Where should my client send premium payments?Thrivent will send premium notices directly to your client. Your client should make premium payments directly to Thrivent, unless you expect the amount of the premium to exceed 30% of your client’s adjusted gross income in that calendar year. If so, it may provide a greater tax benefit to make the payment directly to the Foundation, because charitable deductions for premium payments paid directly to the insurance company may be limited to 30% of the donor's adjusted gross income, excess deductions may not be carried over to future tax years. Payments made directly to the Foundation are limited to 50% of donor's adjusted gross income and can be carried over for up to 5 additional tax years. Please call Foundation staff to discuss this situation.
- What will my client get from the Foundation to use for tax purposes?
Premium payments made on charitable life insurance contracts (owned by the Foundation) qualify as charitable contributions. Although the IRS requires that donors be sent written receipts for gifts of $250 or more, the Foundation provides a written receipt to the donor for all gifts, regardless of size. If premium payments are made directly to the Foundation, gift receipts are sent to the donor immediately. If premium payments are made to Thrivent, the gift is receipted quarterly after the Foundation receives the information from Thrivent. At the end of the year, the donor will receive a cumulative gift receipt for the year.
- Who keeps the insurance contract?
Although the Foundation owns the life insurance, the donor/insured will be sent the contract to keep with his/her personal records. Then the family will know to notify the Foundation and Thrivent of the death.
- Can other types of gifts be made to the donor’s fund?
Many Foundation donors have made multiple gifts to their donor advised fund – some have designated beneficiary proceeds to their fund and some have created charitable gift annuities. The many giving options available to donors are described on pages 4 and 5 of the 'Give Now. Give Later. Give & Receive.' brochure.
The staff of InFaith Community Foundation is available to assist you and your clients with your charitable giving questions. Call us at 800.365.4172 or contact us via email.