If premiums remain to be paid on the policy , the deduction is generally equal to the interpolated terminal reserve value of the policy, an amount slightly in excess of the policy's cash surrender value. You may create a life income trust to provide either a variable or fixed income. A trust providing for a variable rate of income is a Charitable Remainder UniTrust. A trust providing for a fixed rate of income is a Charitable Remainder Annuity Trust. Advantages Creating a Unitrust entitles you to a charitable deduction for the value of Warm Springs' remainder interest.
Transfers are exempt from capital gains tax and the same limitations and carryover provisions apply.
You receive a guaranteed income for life, and Warm Springs receives in your name, a significant gift. The same tax deduction, limitation and holdover regulations apply to the Annuity Trust as in the case of a Unitrust. Advantages Creating an Annuity Trust entitles you to a charitable deduction for the value of Warm Springs' remainder interest. Transfers are exempt from capital gains tax and the same limitations and carry-over provisions apply. You receive a predetermined guaranteed income for life, and Warm Springs receives in your name, a significant gift.