Charitable trusts (CRT and CLT)

You can model both hypothetical Charitable Remainder Trusts (CRT) and Charitable Lead Trusts (CLT) within the Estate Waterfall. This guide outlines how to get started modeling these wealth transfer strategies.

Charitable Remainder Trusts (CRT)

1. Getting started

   1. In a hypothetical waterfall, click on the Hypothetical transfers button and click Create hypothetical transfer.

   2. You will be prompted to select which strategy you want to model. Click on CRT.

2. Transfer details

   1. Enter a description for the transfer name (e.g. Fund 10 year CRT).

   2. Select Create a new hypothetical CRT (you may also select from an existing hypothetical CRT).

      1. upon clicking Create new hypothetical CRT, you will be prompted to enter the CRT assumptions and structure

3. CRT assumptions

   1. Enter the desired display name for the CRT.

   2. Select the desired Donor.

   3. Select the desired Income and Remainder beneficiary(s) and % allocation.

4. CRT structure

   1. Specify the desired Funding value and Cost basis.

   2. Specify the Term: Fixed or Lifetime

      1. If Fixed, enter the term length and desired 7520 rate

      2. If Lifetime, enter the Donor(s) date of birth, length of analysis to display (for illustration purposes only), and 7520 rate

      3. Specify the Payout type: Annuity or Unitrust, as well as the desired Payout amount and frequency

5. Illustration

   1. For illustration purposes in the analysis, you may specify an assumed rate of return for the CRT, as well as view the projected charitable deduction, and income tax savings.

   2. Note, these values do not impact the Estate waterfall projections as you will need to specify the growth rate in the Estate waterfall, and we currently do not account for income taxes.

   3. Click Save and close.

6. Transfer details

   1. Specify the CRT funding amount.

   2. Specify the source entity to fund the CRT from.

   3. Click Save Changes.

You will then be redirected to the diagram view of the estate waterfall with the hypothetical strategy displayed.

Charitable Lead Trusts (CLT)

1. Getting started

   1. In a hypothetical waterfall, click on the Hypothetical transfers button and click Create hypothetical transfer.

   2. You will be prompted to select which strategy you want to model. Click on CLT.

2. Transfer details

   1. Enter a description for the transfer name (e.g. Fund 10 year CLT).

   2. Select Create a new hypothetical CLT (you may also select from an existing hypothetical CLT).

      1. upon clicking Create new hypothetical CLT, you will be prompted to enter the CLT assumptions and structure

3. CLT assumptions

   1. Enter the desired display name for the CLT.

   2. Enter the Tax status

   3. Select the desired Donor.

   4. Select the desired Income and Remainder beneficiary(s) and % allocation.

4. CLT structure

   1. Specify the desired Funding value

   2. Specify the Term: Fixed or Lifetime

      1. If Fixed, enter the term length and desired 7520 rate

      2. If Lifetime, enter the Donor(s) date of birth, length of analysis to display (for illustration purposes only), and 7520 rate

      3. Specify the Payout type: Annuity or Unitrust, as well as the desired Payout amount and frequency

5. Illustration

   1. For illustration purposes in the analysis, you may specify an assumed rate of return for the CLT, as well as view the projected charitable deduction, and income tax savings.

   2. Note, these values do not impact the Estate waterfall projections as you will need to specify the growth rate in the Estate waterfall, and we currently do not account for income taxes.

   3. Click Save and close.

6. Transfer details

   1. Specify the CLT funding amount.

   2. Specify the source entity to fund the CLT from.

   3. Click Save Changes.

You will then be redirected to the diagram view of the estate waterfall with the hypothetical strategy displayed.

FAQ