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FEATURE STORY
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Brentmark Charitable Financial
Planner
This nifty program
calculates the tax results of charitable transfers and presents them in
a way that is easy to use
By Donald H. Kelley
Kelley Rating (one asterisk = lowest, to five asterisks = highest):
-
Ease of navigation, design of interface and learning curve *****
- Instructional documentation and help system ***
- Carries out the goal of the product as advertised *****
- Overall usefulness ****
Charitable Financial Planner
focuses on the calculation of the tax and economic results of charitable
trusts as well as related calculations for grantor-retained annuity
trusts (GRATs), grantor-retained unitrusts (GRUTs) and qualified
personal residence trusts (QPRTs).
When you evaluate such programs, first check out web-based
calculators that are available for free. Then consider what additional
features commercial software offers.
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Calculating for Free
A variety of no-cost tools are available online for making charitable
trust calculations, including charitable planned giving calculators that
calculate the basic tax implications of common charitable gift planning
techniques. Here are two examples:
(1) GiftLaw
Calculator (from Crescendo Interactive)
calculates the income and estate tax deductions flowing from charitable
trusts and charitable gift annuities. The program is also available from
Texas
A&M.
(2) PhilanthroCalc for
the Web online calculators for charitable gift annuities, charitable
lead annuity trusts (CLATs), charitable remainder annuity trusts (CRATs)
and charitable remainder unitrusts (CRUTs) are free web-based
applications. The publisher offers demos of the basic Donor
Direct version and the somewhat more full-featured Compliance
NOW version. You can find Donor
Direct on the Ohio State University website and Compliance
NOW on the Henry &
Associates website.
For more information about online applications, see "Web-Based
Calculators -- Part
I & Part
II," in the February and March 2007 issues of this e-newsletter,
available online and at www.trustsandestates.com.
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What's It All About?
Charitable Financial Planner
2006.1 is a commercial software program costing $395 (less $25 if
downloaded) that surpasses the free online calculators: It calculates
the income tax effects of charitable trust techniques and generates an
income tax savings pie chart, bar chart and schedule.
This program performs calculations appropriate to split-interest
charitable transfers (for a fixed trust term or one-to-five lives),
including CRATs, CRUTs, charitable lead unitrusts (CLUTs), CLATs,
farm/residence remainders, pooled income funds and charitable gift
annuities (immediate and deferred). It also computes the effects of
QPRTs, GRATs and GRUTs and interrelated charitable and estate tax
calculations involving the estate tax and related income-tax outcomes.
Applicable federal rates (AFRs) are automatically downloaded, when so
directed. The program also has a nearest-age calculator.
The charitable remainder trust life cases apply the 5 percent
probability test of Revenue Ruling 77-374 with year-by-year reports and
the 10 percent test. The exhaustion test of Internal Revenue Code
Section 7520 is applied in appropriate models. Presentation graphs are
included to illustrate the effect of varying payouts on the charitable
deduction and to compare different charitable models.
The program is not yet optimized for Vista. In Vista, the Charitable Financial Planner's help
file does not function and the popup screens do not operate correctly.
The strengths of this program are its simple, one-screen, interface and
its emphasis on the income tax consequences of charitable trusts and
related charitable planning techniques.
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How Does It Work?
Charitable Financial Planner is
easy to navigate. The planning techniques are listed on the left pane.
Clicking on the selected technique causes the data entry and summary
report to appear on the rest of the screen.
To operate the program, click on the name of the technique that you want
to address (such as a charitable gift annuity) and enter the required
data in response to the screen prompts. Then select the payment period,
AFR and exhaustion method (where applicable). For split-interest trusts,
you may choose to optimize the payout rate at the highest rate that will
pass the 10 percent test and the exhaustion test.
After you enter data inputs and selections, the same screen displays a
summary of the calculating factors and the donor's deduction for
charitable techniques or the gift from the grantor for QPRTs, GRATs and
GRUTs. A series of tabs allows you to display the income tax results,
the savings on capital gains tax, an economic schedule of beginning
principal, distributions and remainder value for each year and a graph
reflecting the results of the applied technique. Each tab includes pie
or bar charts to illustrate the results.
For each planning technique, you may bring up a screen of income tax
inputs that allow you to define the client's general income tax picture.
The entries include adjusted gross income, deductions and capital gains
information. The program computes the basic income tax imposed on the
donor for the year, the donor's effective and marginal income tax rates
and the donor's income tax after the charitable income tax deduction.
The program allows you to generate a comparison bar chart displaying the
fair market value and the charitable deduction of up to five different
scenarios or trusts. This feature lets you to take a deduction from a
particular calculation and insert it into the graph.
What About Help and Support?
Separate help topics may be displayed for each technique addressed by
the program. Each help topic describes the utility of the technique,
explains how to enter data and how to perform computations. The help
topics also link to topical discussions on the Internal Revenue Service
tests required for the technique to qualify for the targeted deduction
and explanations of the reports generated by the program. Other
substantive legal matters are not addressed in the help system because
the program is targeted towards attorneys, not lay people. Technical
support is available from the publisher by phone, fax or email.
Where Do You Get This Software?
This product is described on the Brentmark website. A downloadable demo is available, along with
patches to the latest
version.
You may purchase the software by contacting the publisher at:
Brentmark Software
3505 Lake Lynda Drive, Suite 212
Orlando, FL 32817-8327
Phone: 1800-897-6665
www.brentmark.com/orders.htm
This program is also available from Leimberg
Associates, which offers a 30-day trial period.
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Competitive
Products
While Charitable Financial
Planner is a good commercial option, it's got three valid
competitors: PhilanthroCalc,
Cresecendo
Pro and Planned Giving
Manager.
PhilanthroTec publishes PhilanthroCalc
for Windows Deluxe 7.0, which conducts charitable deduction
calculations for CRATs, CRUTs, life estate agreements, CLATs, CLUTs,
pooled income funds and charitable gift annuities. It prepares
calculation reports and presentation text and graphics for all deduction
calculations and cash flow models for CRUTS. The program includes
"Presentations," which generates detailed reports with text explaining
the techniques involved, diagrams illustrating the trust process and
reports and graphs that explain the calculations. It costs $595. The
publishers' DC product, which does not include "Presentations," does
deduction calculations for CRUTS, CRATS, life estate agreements, CLATS,
CLUTS, pooled income funds and charitable gift annuities. The initial
price is $150.
Crescendo
Pro covers all the charitable trusts; deferred gift remainder values
with several lives; results of gifts, gift vs. sale, bargain
sales/comparative planning of sales vs. deferred trusts; capital
replacement trusts; and comprehensive estate-planning calculations. It
includes a variety of dynamically generated flow charts, graphs,
narrative plan summaries and drafts of documents. The price is $995,
with an annual service fee of $595. Crescendo
Presents does the basic calculations and generates diagrammatic
graphic and audio presentation of the results. Crescendo
Presents is priced at $150, with an annual service fee of $150 (or
free with the purchase of Crescendo
Pro.) A 90-day trial is available.
PgCalc's Planned
Giving Manager is a full-featured program that calculates remainder
values for all planned giving transactions, including gift annuities,
and addresses investments modeling, wealth replacement, estate plans and
retirement plans. It compares various gift scenarios, projects plan
benefits over time and prepares proposals, graphs and reports, and other
estate-planning calculations and presentations. It costs $1,295 with an
annual service fee of $655. The Mini Manager
version only does the charitable gift plan calculations, comparisons and
related analyses; cost: $495 with an annual service fee of $425.
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Bottom Line
Charitable Financial Planner is
one of several commercial software packages available. It performs
charitable trust and related calculations, quickly calculates income and
estate tax deductions and other information, thereby enhancing your
ability to communicate these concepts to your clients. The program
presents a clear, easy-to-use interface and conveniently addresses your
needs for charitable trust and other split-interest trust calculations.
Trusts & Estates magazine is pleased to present the monthly
Technology Review by Donald H. Kelley -- a respected connoisseur
of the software and Internet resources wealth management advisors use to
further their practices.
Kelley is a lawyer living in Highlands Ranch, Colo. and is of counsel to
the law firm of Kelley, Scritsmier & Byrne, P.C. of North Platte, Neb.
He is the co-author of the Intuitive Estate Planner Software
(Thomson-West 2004). He has served on the governing boards of the
American Bar Association Real Property Probate and Trust Section and the
American College of Tax Counsel. He is a past regent and past chair of
the Committee on Technology in the Practice of the American College of
Trust and Estate Counsel.
Trusts & Estates has asked Kelley to provide his unvarnished opinions
on the tech resources available in the practice today. His columns are
edited for readability only. Send feedback and suggestions for articles
directly to him at dhkelley@qwest.net.
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