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Charitable Remainder Trusts and Life Insurance Trusts (Wealth Replacement Trusts) In addition to making significant charitable gifts possible, both types of charitable remainder trusts (annuity and unitrust) are excellent financial and estate planning tools. The drawback, however, is that the assets donated to the trust are irrevocably taken from potential heirs and given to charity. A very popular alternative used today is a combination of a charitable remainder trust and a life insurance trust. The charitable remainder trust provides lifetime benefits to you, the donor, and then after death to the charity. The life insurance trust replaces to your heirs the asset value given to charity and may increase your heirs' net inheritance over what they would have received had you not made the charitable gift.
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