An irrevocable trust designed to reduce beneficiaries’ taxable income by first donating a portion of the trust’s income to charities and then, after a specified period of time, transferring the remainder of the trust to the beneficiaries.
Consider Jack and Barb who had amassed considerable wealth by working hard throughout their lives. Their adult children had done well for themselves, too. The last thing Jack wanted to do was to saddle his family with a huge tax burden. So he worked with his financial advisors structure an irrevocable trust that benefited his family’s favorite charity first and later benefitted them.