Testamentary charitable trusts

1. Create a new hypothetical waterfall; note that existing testamentary Charitable Trust can be added to source Waterfalls, using the same steps.

2. Select the entity(ies) you would like to use to fund the testamentary Charitable Trust

   1. You can use this type for both Charitable Lead Trusts, and Charitable Remainder Trusts

3. Edit the dispositions for the entity(ies) that will be used to fund the Charitable trust

   1. Under recipient, "add new" and select "testamentary entity", under type select "charitable trust"

   2. Once you have created the testamentary charitable trust, you can enter the amount you would like to fund the charitable trust

      1. Note that if the Testamentary Trust is "zeroed out" and doesn't require a taxable gift, you can set the full amount going into the CLT as a "Charitable" recipient

      2. In the event you would like to funding the Testamentary CLT with a taxable gift, make the a disposition for the amount of the charitable gift set to the recipient type "G2/3"; Tip- use the f(x) option to have the taxable gift amount be the remaining exemption

4. When you save the dispositions, you will see the new charitable entity render on your Waterfall diagram. The one caveat is we don’t have the ability today to project CLT outcomes once the grantor has passed, in the Estate Waterfall. However, you can use our CLT tool in the "Calculator" page to simulate how the CLT will perform once it has been funded.

5. You can create several hypothetical waterfalls to simulate the Estate Tax implications of various amounts of funding going into the testamentary CLT, and use the "Compare" view to illustrate outcomes across scenarios.

Using CLT/CRT Calculators to Model Testamentary Charitable Trust Outcomes

See below for a more detailed walkthrough on the CLT/CRT analysis tool:

📄 Charitable trusts (CRT, CLT)