And because the policy is owned by the life insurance trust, its value will not be included in your taxable estate. As a result, it will pass to your children without reduction for estate taxes. Of course, there are many variations on the hypothetical situation we have reviewed here. The charitable trust can be funded with an annuity, or it can give income to the charity during your life with the remainder going to your heirs. The type of property you put in the trust can also vary.
Stocks are a good gift to make, as is appreciated real estate.
Cash can be given to the trust, although there would be no capital gains tax savings on such a gift. The residence or encumbered property are difficult to work with in a charitable trust. Tangible personal property is not usually a good choice because generally there is no income tax charitable deduction allowed for such a gift. Income from the CRT can be adjusted so disbursements do not impair the capital in the trust. Rather than explore all of these many variations here, simply be aware that the tax code favors charitable gifts, and with the right arrangement, charities can be benefitted without detriment to you or your heirs.