The airplane collided with trees shortly after a downwind takeoff from a 1400 foot private grass airstrip. The instructor departed downwind for terrain considerations. According to the instructor, he let the student (his wife) takeoff, but took control when he noticed the airplane had gone too far down the runway. He lifted off and outclimbed a hill, but the airplane started to sink until it struck a tree, a quarter mile past the runway. The instructor reported no mechanical malfunctions. He stated the accident could have been prevented if he had lifted off sooner.