Wealthy individuals require liquidity for estate tax purposes and often desire to provide a maximized legacy for a university or charity of their choice. This strategy works extremely well for Charities and Non-Profits.

Our premium financing strategies help Charities and Non-Profits raise more money in less time with minimal or non cost or risk. This program has worked for 1000’s of clients. Cayman Capital will recommend the Plan best to meet the donor and the non-profit or charities goals. We can also work with a CPA or attorney of your choosing.

There is immediate tax-free escalating income to the foundation, to an endowment or church, or other charitable non-profit, starting from the first year and continuing every year for the entire life of the donor. This program has been a very beneficial offering for well known charities, hospital foundations, university endowments and churches.

  • The client and their attorney and CFO has the option of confidentially discussing their individual case design and see an objective report of the facts with the actuarial firm creating the performance spreadsheets for donor, and the income and legacy strategy illustrations and spreadsheets prior to any commitments.​
  • The donor has the beneficial impact of high income bracket tax savings, as the donor retains assets, otherwise used to pay after tax premiums with earned money, on usually a large insurance bequest. The donor also retains more liquidity for other investments.
  • ​For the donor it is usually cheaper to provide collateral rather than writing a big check.  A no collateral design is also available depending on the clients unique circumstances.
  • The donor need not pay back the loan. This is because with the premium financing strategy no exit strategy is needed to pay back the loan as it is designed into the plan
  • There are fund raising and donor incentives such as the donor avoids gift taxes. Donor can use their gift tax allowance for other assets, for greater value, as gifts to a Trust are not used.
  • Compound interest provides an increasing income over time with a unique proprietary design, and compounding is additionally maximized by an initial large deposit of money.
  • Cost of collateral and interest does not come out of the donors pocket. The foundation or charity receives a significant tax-free legacy net of loan.
  • No money is ever accepted from the donor.
  • The program has been especially effective with Foundations and University Endowments and their High Net Worth Donors.

A donor with a prior and current life insurance policy can apply the 1035 exchange for the premium finance design so there would be no more check writing going forward.

​The foundation, university, charity or church, then would start beginning from that year forward, receiving an immediate escalating maximized tax-free income to that donor’s non-profit every year for the life of the donor and the legacy.

WEALTH REPLACEMENT TRUSTS

Life insurance can also be used to replace the wealth given to a charity so that so that beneficiaries receive the same amount of money in a passed loved one’s estate. Contact us for more information on charitable programs such as Charitable Retained Annuity Trusts (CRAT), Charitable Retained Unitrusts (CRUT), Charitable Lead Trusts or Donor Advised Fund Programs.