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Phoenix Touts Philanthropy As Financial-Planning Strategy.

High-net-worth people, those with assets of more than $1 million excluding primary residence, are overwhelmingly socially conscious, according to a wealth-management survey conducted by Phoenix Home Life Mutual Insurance Co., Hartford, Conn. That finding bodes well for insurers offering strategies that provide tax advantages for charitable giving.

The "2000 Phoenix Wealth Management Survey" found that more than 80% of high-net-worth people feel an obligation to give back to their communities. Many are a new breed of wealthy young entrepreneurs and professionals concerned about environmental and social issues, the company said. More than 90% of those surveyed said they annually contribute to charity, and two-thirds volunteer their time. Annual charitable contributions range from $5,000 to $7,000 for those with a net worth of $1 million to $3 million, and $10,000 to $15,000 for those with more than $3 million.

Charitable contributions can be income-tax deductible in the year they are made, and they can reduce 'estate taxes. Phoenix and its advisers suggest charitable lead trusts, charitable remainder trusts or life insurance.

In a lead trust, contributed assets are placed in a trust, which pays income to one or more charitable organizations for a stipulated amount of time. At the expiration of the term, the assets remaining in the trust pass to the trust beneficiaries, usually the donor's children or other heirs.

In a remainder trust, the contribution goes to an irrevocable trust and the donor retains either an annuity interest, in which the percent is determined at the creation of the trust, or a unitrust interest, in which the payout is calculated annually. The donor retains the income interest for life or a specified period. At the end of the trust term, or upon the donor's death, the remaining property is paid to designated charities.

A gift of life insurance to charity can be as simple as naming the charity as a beneficiary or as the owner of the policy. More sophisticated techniques also can be used with life insurance, according to Phoenix, which provides wealth-management strategies through insurance, investment management and trust services.
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Title Annotation:Phoenix Home Life Mutual Insurance Co. survey
Comment:Phoenix Touts Philanthropy As Financial-Planning Strategy.(Phoenix Home Life Mutual Insurance Co. survey)
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:May 1, 2001
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