One possible solution is to use the income you receive from the charitable remainder trust to purchase a life insurance policy on yourself. However, if you own the insurance, the proceeds will go into your taxable estate. An alternative, you might want to consider purchasing an insurance policy in an irrevocable life insurance trust. Because the trust actually owns the insurance policy, the proceeds will be kept out of your taxable estate, which means your heirs will pay less in estate taxes. And, you can direct the trust to provide your heirs with regular income.
Trusts can be complex instruments.
Before establishing one, consult with your legal adviser. Everyone is a Winner Deciding how to make a charitable gift through a straight donation of appreciated stock or through a charitable remainder trust will depend, in large part, upon your financial objectives. If a tax deduction is your primary objective, making an outright donation may be the most appropriate route for you. A charitable remainder trust, on the other hand, might be appropriate for someone seeking an income stream, under certain circumstances. Regardless of how you choose to make a charitable gift, you'll be helping a value institution and yourself.