Many people no longer need all of the life insurance they purchased years ago to provide for their children or other family members. If that is your situation, please consider donating one of your policies or part of a policy to the WUSA Endowment Fund. Your charitable tax deduction would be the lesser of the cost or the cash value of the policy. If you continue to pay annual premiums, these are also tax-deductible. And, the proceeds are completely removed from your estate. The future benefits to the Endowment Fund would be equal to the face value of the policy.

Or, by combining the tax benefits of life insurance and a Charitable Remainder Trust, you can make a sizeable charitable contribution and leave a large tax-free inheritance for your beneficiaries.

For example, you could put $1,000,000 of assets into a Charitable Remainder Trust, thereby removing those assets from your estate and avoiding estate tax on those assets. You then take a portion of your income from the CRT to purchase a wealth replacement life insurance policy to benefit your beneficiaries.

The end result is that you receive a $1,000,000 charitable tax deduction the year you contribute to the CRT. You also avoid capital gains taxes on the sale of appreciated assets. You have reduced your estate by $1,000,000, thereby reducing the tax burden on your beneficiaries. And, you have provided your beneficiaries with a life insurance policy that will pay them $1,000,000 in tax-free benefits upon your death.

This very creative method of combining the tax savings of a CRT and life insurance policies is a very well accepted method of utilizing charitable giving and tax savings to protect your assets and your beneficiaries from capital gains taxes and estate taxes.