How does a Wealth Replacement Trust work?
June 1, 2009
- Assets are transferred to a charitable trust.
- The trustee agrees to pay a fixed or variable income for the remainder of the life of the donor or beneficiary (ies).
- Income tax savings from creating the trust and perhaps some of the trust income can be used to purchase a life insurance policy for you with children or other heirs designated as beneficiaries.
- Upon the donor’s death, the assets of the trust go to a designated charity and the death benefit of the life insurance policy to the heirs.