Charitable Giving  ·  Estate & Legacy Planning

The Policy You Don’t Need Anymore Could Be Your Biggest Gift

Two quiet tax law changes no longer point in the same direction they used to. Together, they raise a question worth asking about your charitable giving strategy — and a policy you may already own.

The right key can turn an asset that’s no longer working for anyone into a legacy that keeps working for decades.

A charitable giving strategy that worked well for a decade can quietly stop working without anyone noticing — and 2026 is exactly that kind of year. You bought the policy for a reason that no longer exists.

Maybe it was estate liquidity. Maybe it was income replacement for a family that has since grown up and moved on. Whatever the reason, the federal estate exemption is now permanently set at $15 million per person — $30 million per couple, and unlike the temporary increases donors have grown used to bracing for, this one isn’t going anywhere. Most of the families who bought life insurance to solve an estate tax problem no longer have one.

So the policy sits there. Premiums get paid out of habit. Nobody asks the question that actually matters: what is this for now?

The Asset You Bought for a Problem You May No Longer Have

For decades, life insurance was the default answer to a very specific fear: that a family’s estate would owe tax it couldn’t easily pay, and that heirs would be forced to sell a business, a property, or an investment portfolio just to cover the bill. Advisors built entire plans — and entire charitable giving strategies — around that fear, and for good reason. It was a real risk for a lot of families.

The One Big Beautiful Bill Act changed that math permanently. With the exemption now at $15 million per individual, a large share of the families who bought coverage for that exact purpose are, today, simply not exposed to the tax it was designed to offset.

That doesn’t make the policy worthless. It makes it unassigned. And an unassigned asset, sitting in a filing cabinet with premiums paid out of habit, is exactly the kind of thing worth a second look — and exactly why so many charitable giving strategies built five or ten years ago deserve a fresh one in 2026.

The Quiet Change Working Against Your Annual Giving

At the same time, a second change is making the “what now” question more urgent. Starting this year, itemizers can only deduct charitable gifts above 0.5% of AGI. The dollar amount below that floor isn’t reduced — it’s gone. Not carried forward. Simply lost.

The math behind that 0.5% floor is straightforward once you see it, and for a donor in the top bracket, the marginal value of every dollar given has also quietly dropped. The short version: your CPA will likely mention this to you in December. By then, the planning year — and the window to adjust your charitable giving strategy — is already over.

Two donors give the exact same amount, over the same five years, to the same charities. One structures it deliberately. One gives on autopilot. The gap between what each of them can actually deduct is not small.

That’s a gap I wrote about recently, and it struck a nerve with a lot of people in the development world. It is not a coincidence, and it is not something most donors — or the development offices that depend on them — have priced into their charitable giving strategy yet.

A Charitable Giving Strategy Built for Where These Facts Meet

An estate exemption most families no longer need. A deduction floor working against the same annual giving they’ve done for years without thinking twice about it.

Individually, those are two separate conversations — one with your estate attorney, one with your CPA. Together, they point at something neither conversation usually covers on its own: whether your current charitable giving strategy is still doing what you think it’s doing, and whether the life insurance sitting behind it is doing anything useful anymore.

There is a way to connect an asset you may no longer need to a charitable giving strategy that protects the deductibility of what you’re already doing — and does it in a way that can outlast you by decades. It isn’t complicated once you see it laid out, but it does depend on getting the sequencing, the ownership, and the timing right. Done well, it turns a policy sitting dormant in a filing cabinet into a legacy that keeps working long after the reason you originally bought it has stopped mattering.

I put together a full breakdown of how this works, including four distinct ways to structure it depending on whether you’re looking to keep your options open, redirect a policy you no longer need, or build something more deliberate for the years ahead.

Why the Right Charitable Giving Strategy Isn’t One-Size-Fits-All

The honest answer is that the right charitable giving strategy depends entirely on what you already own, what you no longer need, and what you’re trying to accomplish — for yourself, your heirs, and the causes you’ve spent a career or a lifetime supporting. Those are not questions with a generic answer, and anyone who gives you one without knowing your specifics is guessing.

If you own a policy you’re no longer sure you need — or if your charitable giving strategy has quietly stopped producing the deduction it used to — that’s worth a conversation before the end of the year, not after.

Educational only — not individualized tax, legal, or investment advice. Please consult your tax advisor, attorney, or financial professional regarding your specific situation.