Gifting these securities allows the donor to claim a charitable tax deduction for the full value of the gift and avoid capital gains taxes. When reserving a life estate, the donor deeds their real estate to the charity and reserves the right to use the property for their life. The donor receives an immediate tax deduction. All kinds of personal property can be given, cars, art, jewelry, boats, horses, etc. Many ways are used to give a gift through life insurance.
Life insurance is used sometimes to replace the value of gifts given through charitable trusts.
A donor can name a charity in their plans for disposing of the remainder. The owner has to cash them in and then give the proceeds. That means the donor can get charitable income tax credit on their gift, but cannot avoid paying taxes on the accrued interest. However, if such a bond is given to the charity through a person's will, the income and estate taxes can be avoided. If they are given to heirs, income taxes are still due on the accrued earned income.