Life Insurance . Gifts of life insurance provide your favorite charities with the security of future bequests. Upon your death, the charities you have designated receive the policy proceeds without tax liability or administrative costs. By purchasing a life insurance policy and naming a charity as owner and beneficiary, you may be eligible for a current income tax deduction and for tax deductions in the future. CRTs are gaining in popularity because they can provide both income and estate tax advantages.
Assets can grow tax-exempt inside the trust.
When they are sold, they generate no capital gains tax in the trust. Because a charitable tax deduction reduces current income taxes, the donor may be in a more favorable tax situation as a result of the donation. The charity receives the assets at the end of the term of years or at the death of the last remaining beneficiary. In some cases, assets given to the CRT can be replaced for the heirs by using life insurance in a Wealth Replacement Irrevocable Trust. Your tax savings from the CRT can fund a policy in an amount you select, free of income and estate taxes.