Instead of directing income payments to the donor, this type of trust provides income payments to Angelwish for a specified number of years. After that term, the trust assets are transferred to younger beneficiaries the donor designates, with a substantial deduction on the gift or estate taxes in consideration of the income stream to Angelwish. These funds are then used to cover premium payments on a life insurance policy on the donors' lives. When the donors are no longer living, the charitable trust benefits Angelwish, and the families of the donors receive the insurance proceeds from the Insurance Trust. Since the Insurance Trust is the legal owner of the life insurance, this asset is not included in the donors' estate and is received by their children completely free of all tax burdens.
All donations are tax deductible to the full extent of the law.