You also create a life insurance policy, naming your children or other heirs as beneficiaries. The amount of the death benefit replaces the contribution you made to create your life-income gift.
You pay the premiums for the policy from the income you are receiving from your life-income gift.
At your death, William & Mary receives the remaining balance of your gift plan, and your heirs receive cash in the amount of your original gift.
Benefits
You make a significant gift to William & Mary with no negative effect on your family's financial security.
After your gift, your estate is replenished for the benefit of your heirs.
No new assets are required to pay for this replacement: tax-savings from the charitable deduction plus income you receive from your new gift plan pay the premiums.
Donors with large families or children who will need long-term assistance can consider helping William & Mary at a level they never thought possible.
One asset can do the work of two: make a gift to William & Mary and provide an equal benefit to your heirs.
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More detail on gifts of life insurance - gift-replacement.
