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Charitable Trusts Programs: Looking Beyond the Basics

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.

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.

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.

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.

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.

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 [email protected].
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