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Put Power & Control on Every Desktop in Your Firm
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FEATURE STORY
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Charitable Trusts Programs: Beyond
Basics
With advanced features and
functionality, these programs offer more than what first meets the
eye
By Donald H. Kelley
In last month's enewsletter, we discussed basic level computation of
the economic and tax results of charitable trusts and other
planned-giving techniques, focusing on the Brentmark Charitable Financial
Planner and comparing it both to freebies available on the Internet
and to competitive, commercially available programs. Now, let's look
beyond the basic calculations to compare programs that produce graphic
and text-based client education and information
materials.
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High-End
Charitable-Planning Programs
Charitable-planning programs serve the needs of planning advisors and
charitable organizations as they work with established clients and
prospective donors.
PhilanthroCalc for Windows Deluxe, published by PhilanthroTec, produces robust reports.
It stresses the more conventional calculations of the charitable
deductions generated by each technique. The program also generates the
most sophisticated explanatory text materials and is technically
appealing. It provides excellent tools for the estate and
charitable-giving planner.
Crescendo
Pro has graphics galore. It emphasizes comparisons of both the
charitable-giving and wealth-planning effects of the techniques analyzed
and generates reports that are useful for organizations working with
prospective donors. The inclusion of the GiftLaw Pro
feature makes it valuable for estate planners.
Planned Giving
Manager, from PG Calc
Incorporated, offers strategic scenarios. With its emphasis on
retirement projections and wealth planning, it is a program that should
be of particular interest to financial planners. The inclusion of basic
level estate tax calculations and the integration of analysis of
charitable-planning techniques makes it useful to estate planners.
PhilanthroCalc: Robust Reports
Kelley Rating (one asterisk = lowest, to five asterisks =
highest):
- Ease of navigation, design of interface and
learning curve ****
- Instructional documentation and help system ***
- Graphic expression of results ***
- Reports and client information *****
PhilanthroCalc
for Windows Deluxe is an Excel-based program that operates with
Excel macros. For a given client, you input basic client information,
tax data and cash flow information on a client profile screen. You then
make program selections from a drop-down menu at the top of the toolbar
and enter data for selected scenarios that later will be used in
reports, which you can preview, print and export.
The program addresses charitable remainder annuity trusts (CRATs),
charitable unitrusts (CRUTs), life estate agreements, charitable lead
annuity trusts (CLATs), charitable lead unitrusts (CLUTs), pooled income
funds as well as immediate and deferred charitable gift annuities
(CGAs).
CRUTs may be designated as standard, net income, net income with makeup
charitable remainder unitrust (NIMCRUT), flip or a combination of flip
and NIMCRUT trusts. PhilanthroCalc
tabulates gross and net cash flow, deductions and tax savings for each
year of the trust. It projects estimated rates of return for ordinary
income, capital gain, exempt income and growth for each year of the
trust, including years directed for investment switching. For each
approach, there are annual schedules for the trust's lifetime. The
program also includes a comparison of a CRUT to the sale of contributed
property and analyzes the use of life insurance as a replacement for
contributed property.
PhilanthroCalc
has a "Presentations" facility, which generates detailed client
presentations with a customized title page plus diagrams, text and
graphs explaining the calculations. It recaps the facts used in the
analysis, explains how the calculations are made, and provides
background information on each technique. It also explains the tax and
financial benefits of the selected technique, the charitable deduction
calculation and the income tax charitable deduction rules and
limitations.
With this program, you can generate reports with exploded pie charts.
For each scenario, there are screens explaining the eligibility tests
for charitable trusts and calculations, including whether the trust
passes the 5 percent and 10 percent tests. You also can produce reports
depicting all deduction calculations and cash flow models for CRUTs.
PhilanthroCalc
costs $595 and is available from the publisher, PhilanthroTec. You may download sample
reports in portable document format (PDF) and Microsoft Excel format
or obtain a 30-day trial demo from the PhilanthroTec
website.
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Crescendo Pro:
Graphics Galore
Kelley Rating (one asterisk = lowest, to five asterisks = highest):
- Ease of navigation, design of interface and learning curve
****
- Instructional documentation and help system *****
- Graphic expression of results *****
- Reports and client information ****
With Crescendo
Pro, you begin with the master record on which you enter personal
and property value data for the client, then select individual screens
for each planned-giving technique and enter data and make planning
selections, such as payment frequency and payout amount.
Crescendo
Pro includes dynamically generated flow charts and a variety of bar
or line graphs, including a hold, sale or trust comparison. It prepares
narrative plan summaries. Personal letters to clients and drafts of
specimen documents for gift and retirement annuities, annuity trusts,
lead trusts, unitrusts (terms of years and one to eight lives), flip
unitrusts and interrelationships of such trusts with individual
retirement accounts, insurance and sales.
With this program, you can generate client proposals with particularly
clear and informative personalized flow charts of the selected
charitable transfer technique. The flow charts (you can view examples on
the Crescendo
Presents and Crescendo
Estates webpages) include calculations related to the facts entered
and the technique selected. You also can produce line charts of trust
growth and insert flow charts and graphs into PowerPoint. The program
calculates the best option from a selection of planned-gift choices,
based on your evaluation of the client's priorities. It also generates
text materials for the advisor explaining the program's calculations.
The proposals include explanations of the selected technique, the income
flow, the income tax deduction, management of the technique, analysis of
the benefits to the family and to the charity, total effective return
rates, explanations for the advisor and a data entry worksheet. Detailed
annual schedules are included with gross and net trust income, income
tax savings and total benefits. A tabular analysis of the necessary
calculations is included, along with a detailed tax explanation of the
flow chart, the trust benefits, the deduction calculation, an analysis
of the effective return rates of the trust being analyzed and a tabular
analysis of the alternatives of holding the property, selling it and
using the charitable trust. You can edit text explanations within the
program through the built-in word processor and produce proposals in PDF
format. The PDF format is convenient for email transmission to clients
and associated professionals.
The program costs $995, with an annual service fee of $595 and is
available from the publisher, Crescendo Interactive.
It includes Crescendo
Presents, which generates charts and audio explanations of the
results. A 90-day trial is available.
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Planned Giving
Manager: Strategic Scenarios
Kelley Rating (one asterisk = lowest, to five asterisks = highest):
- Ease of navigation, design of interface and learning curve
*****
- Instructional documentation and help system ****
- Graphic expression of results ****
- Reports and client information ****
With PG Calc's Planned Giving
Manager, you choose from various gift plan and comparison templates.
You then fill in client information, plan data and select the desired
report output for each element of the template. The data entered is
integrated into the reports.
Planned Giving
Manager compares various gift scenarios, projects plan benefits over
time and prepares proposals, graphs and reports, and other
estate-planning calculations and presentations. It allows you to select
among a basic estate plan (with estate tax computation based on the
entry of the gross estate and a percentage for estate settlement costs),
an estate plan with charitable gift-based life income plan, basic
benefits and projections for gift annuities, annuity trusts and
unitrusts, gift annuities, comparisons of various charitable gift plans,
lead trusts (with several variations, including living and testamentary
trusts), retained life estates, sales, wealth replacement plans (with a
selection of sources), pooled income funds and annuity trusts.
The program includes bar charts to compare funding amounts and types of
charitable funding techniques side by side. It creates sample diagrams
of unitrusts, CGAs, simple wills and estate plans (including those with
life income, credit shelter and marital trusts) and future projections.
The program allows you to add graphics and charts to your printed
materials. You may set calculation options for dollars and cents, plus
timing of transfers and payments. The program calculates and presents
the tax implications on the basis of the client's retirement projections
and estate plan. Information entered for the various planned giving
techniques is integrated into retirement, estate tax and wealth
replacement projections and reports for future modeling. The program
also produces prototype gift annuity agreements, including state
prototypes, with data integrated from the program, as appropriate.
The reports may be edited in Word or WordPerfect or exported to Excel.
The program includes a "PowerPoint Preview" feature that allows you to
construct PowerPoint slides from the reports generated. You also can
export to Blackbaud's Raiser's
Edge donor database software and to the publisher's GiftWrap planned gift
database program.
Planned Giving
Manager costs $1,295, with an annual service fee of $655, and is
available from the publisher, PG Calc
Incorporated. You may download the program for a 90-day
evaluation.
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Help and
Support
If you are considering purchasing one of these programs, you may want to
look carefully at the program's help systems and what sort of support
services come with the product. Help and support are critical to
successful operation of any program -- but many folks don't think about
this until after they've purchased the product. Here's some information
on the help and support available:
The PhilanthroCalc
for Windows Deluxe help system includes well presented descriptions
of the functionality of the program and detailed operating instructions,
but does not include substantive help text. It has context-sensitive
topics for each program screen. Email and telephone program support are
provided.
The Crescendo
Pro help system is in the format of a contents pane that provides an
index to the topics and a pane that displays the help topics. It offers
explanations of program features and functions, includes comprehensive
charitable giving and tax information from the publisher's GiftLaw Pro, and
offers online text and audio explanations. You can get video
explanations through the Crescendo Gift College
is available at an additional cost. You may access all help services
from the data entry screens. The program includes an electronic manual
in PDF format covering the program procedures in detail. Telephone and
email support are available.
The PG Calc's Planned Giving
Manager help system indexes the transactions covered,includes a
glossary describing each of the program's planning techniques and
explains the derivation of each calculation. The program includes a
feature called "democlips," which allows you to select demonstrations of
various program features. Support is provided by email and
telephone.
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Bottom Line
The high-end programs for charitable-planning practitioners and
organizations do the basic deduction calculations and much more. Each of
these programs offer rich features and functionality, unique
combinations of graphic and textual descriptions for client education
and information and helpful resources for the practitioner. Naturally,
they cost more than the basic calculations programs.
A word of caution: although features and functionality are a
consideration, they are not always the deciding factor when purchasing
one of these products. You also need to evaluate these programs on the
based on your practice needs and emphasis. Ultimately, it's the
program's utility that matters . . . whether it works for you, your
clients and your practice.
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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