Gifts of unlimited amounts may be made to qualified charitable organizations. These gifts may be made during your lifetime or at your death. Either way, the transfer reduces the amount of your estate that would otherwise be subject to federal estate taxes. Lifetime charitable gifts have an income and capital gains tax advantage over charitable bequests that are made at your death.

A gift of a life insurance policy can be an effective method of charitable gifting with significant estate planning results. Life insurance provides an “amplified” gift that allows you to pay a small annual cost (the insurance premium) for a sizable donation; for example, a 10 year policy with a premium of $5,000 leverages $50,000 in payments into a $360,000 gift.

For some people, making a lifetime charitable gift is more attractive if they can give an asset to charity, but retain the future income from the gifted asset. This type of arrangement can be made if you are willing to give up some of the charitable income tax deduction that is generally available for lifetime gifts to charities.