How to Benefit From a Wealth Replacement Trust

The property in the trust is then sold and reinvested to provide income. You generally retain a lifetime interest in the income generated by the trust, and when the trust expires at your death, the remaining property in the trust is transferred to the charitable organization.

1. What is the common use of a wealth replacement trust?
2. How does a wealth replacement trust work?
3. What are the benefits of a charitable trust?

What is the common use of a wealth replacement trust?

A wealth replacement trust is a planning tool in which a donor uses the income or tax savings from establishing a life-income gift, such as a gift annuity or charitable remainder trust, to buy life insurance to replace the assets that he or she is giving away.

How does a wealth replacement trust work?

A Wealth Replacement Trust is an Irrevocable Life Insurance Trust that works in tandem with a Charitable Remainder Trust to replace wealth transferred to the charity, which allows you to maximize your charitable deduction with no reduction in the wealth you transfer to the next generation of your family, while ...

What are the benefits of a charitable trust?

Pros of a Charitable Trust:

• A charitable remainder trust allows you to donate generously to the charities of your choice, while providing a tax break for yourself and your heirs.
• In this type of trust, the charity itself acts as trustee, managing or investing the property so it produces income for you.