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GIFTS OF AND USING LIFE INSURANCEpayable to the donor must be either a fixed amount of money 22 or a fixed percentageof the trust assets. 23 Payments can be made to the donor for his or herlifetime or for a term of years. If appropriate, the trust can provide for paymentsfor the donor’s lifetime and the lifetime of the donor’s spouse.The donor in this circumstance receives a current income tax deduction forthe present value of the future gift of trust assets to the charity. A small annualincome payment to the donor (and spouse) during lifetime will result in a largergift to charity, inasmuch as the trust assets will not be as depleted. As a result,the current income tax charitable deduction will be higher. If larger income paymentsare desired, the current tax deduction will be lower.To preserve the assets passing to the donor’s heirs, the donor can create anirrevocable life insurance trust, make tax-free gifts of the donor’s tax savings tothe trust, and allow the trust to insure the donor’s life. This use of the survivorshipwhole life policy is ideal if the charitable remainder trust pays an income toboth the donor and his or her spouse.Perhaps an individual cannot afford to contribute a major asset to charity atthe time, yet wants to provide for income to his or her spouse for life and wouldlike to make a major gift to charity. Life insurance can assist an individual in thissituation.First, the individual establishes a charitable remainder unitrust. 24 This trustprovides for payment of a fixed percentage of income for the life of the individualand his or her spouse. Second, the trust purchases insurance on the donor’slife. The trust pays the insurance premiums from annual gifts that the donormakes to the trust. During the donor’s lifetime, there is little if any payment tothe donor and spouse, since the trust asset is the life insurance policy on thedonor. At the donor’s death, the trust receives the death proceeds and paysincome to the surviving spouse for his or her lifetime. At the death of the spouse,the trust distributes the remaining assets to the charity or charities that are theremainder interest beneficiaries.This arrangement benefits the donor in two ways. The spouse receives aguaranteed income and, because a remainder interest is paid to charity, thedonor is allowed to deduct a portion of the annual gift of premium payments tothe charitable remainder unitrust. In effect, it is a way to purchase life insuranceon a partially tax-deductible basis. During lifetime, the donor may be allowed tochange the charitable remainder beneficiaries and may revoke the spouse’sincome interest by a provision to that effect in the donor’s will.Mention was made above of the rule concerning employer-provided grouptermlife insurance. 25 The point was made that such coverage in excess of $50,000of insurance gives rise to gross income for the employee recipient. There is, however,an exception to that rule, pertaining to situations in which a charitableorganization is named as the beneficiary of any insurance in excess of the$50,000 threshold. 2622 See § 12.2(a).23 See § 12.3(a).24 Id.25 See § 17.2(b), text accompanied by note 4.26 IRC § 79(b)(2)(B); Reg. § 1.79-2(c)(3). 534