A tool used to estimate the financial implications of establishing a specific type of irrevocable trust that combines charitable giving with potential income for the donor or other beneficiaries. It performs calculations to project income streams, tax deductions, and the ultimate value of the assets that will pass to a designated charity. For example, it can project the annual income a donor might receive from a trust funded with securities worth $500,000, assuming a specific payout rate and investment growth, while also estimating the charitable tax deduction available in the year the trust is created.
The ability to model various scenarios offered by these tools is valuable in financial and estate planning. They can help individuals determine if establishing such a trust aligns with their philanthropic goals and financial needs. Historical context reveals a growing interest in these trusts as individuals seek tax-efficient ways to support charities while maintaining or supplementing their income.
