function calculateCRUT() {
// 1. Get Input Values
var initialFmvInput = document.getElementById('initialFmv');
var payoutRateInput = document.getElementById('payoutRate');
var growthRateInput = document.getElementById('growthRate');
var trustTermInput = document.getElementById('trustTerm');
var initialFmv = parseFloat(initialFmvInput.value);
var payoutRatePct = parseFloat(payoutRateInput.value);
var growthRatePct = parseFloat(growthRateInput.value);
var termYears = parseInt(trustTermInput.value);
// 2. Validate Inputs
if (isNaN(initialFmv) || initialFmv <= 0) {
alert("Please enter a valid Initial Fair Market Value.");
return;
}
if (isNaN(payoutRatePct) || payoutRatePct 50) {
alert("Payout rate must be between 5% and 50% per IRS regulations.");
return;
}
if (isNaN(growthRatePct)) {
alert("Please enter a valid Annual Growth Rate.");
return;
}
if (isNaN(termYears) || termYears 100) {
alert("Please enter a valid Trust Term (Years).");
return;
}
// 3. Calculation Logic
var payoutRate = payoutRatePct / 100;
var growthRate = growthRatePct / 100;
var currentBalance = initialFmv;
var totalBeneficiaryIncome = 0;
var scheduleHtml = "";
// Loop through years
for (var i = 1; i <= termYears; i++) {
var startBalance = currentBalance;
// CRUT Calculation:
// 1. Payout is determined based on the start-of-year value (standard method)
var annualPayout = startBalance * payoutRate;
// 2. Trust assets grow
// 3. Payout is distributed
// Simplified Approximation: End Balance = (Start Balance * (1 + Growth)) – Payout
// Note: Exact timing varies by trust document, this assumes end-of-year reconciliation
var endBalance = (startBalance * (1 + growthRate)) – annualPayout;
// Accumulate totals
totalBeneficiaryIncome += annualPayout;
// Generate Table Rows for first 5 years only to save space
if (i <= 5) {
scheduleHtml += '
Understanding the Charitable Remainder Unitrust (CRUT)
A Charitable Remainder Unitrust (CRUT) is a powerful estate planning strategy that combines philanthropy with financial benefits. Unlike a standard annuity trust, a CRUT revalues its assets annually, meaning the income you receive fluctuates based on the performance of the trust's investments.
How This Calculator Works
This tool projects the cash flow and final charitable gift based on the specific mechanics of a unitrust. Here is a breakdown of the inputs required:
Initial Fair Market Value (FMV): The total dollar amount of cash, stock, real estate, or other assets you intend to transfer into the trust.
Unitrust Payout Rate: The percentage of the trust's value that is paid to the income beneficiary (usually you) every year. The IRS mandates this must be at least 5% and no more than 50%. Because the trust is revalued annually, if the trust grows, your payout grows.
Est. Annual Growth Rate: The assumed annual return on investments held inside the trust. This includes both capital appreciation and income (dividends/interest).
Trust Term: The duration the trust will operate. This can be a fixed number of years (up to 20) or for the lifetime of the beneficiaries.
CRUT vs. CRAT: The Difference
The primary difference between a Unitrust (CRUT) and an Annuity Trust (CRAT) is how the payout is calculated:
CRAT: Pays a fixed dollar amount regardless of investment performance. The income never changes.
CRUT: Pays a fixed percentage of the trust's current value. If the trust investments perform well (exceeding the payout rate), the principal grows, and your subsequent payouts increase. This provides a potential hedge against inflation.
Example Scenario
Consider a donor who transfers $1,000,000 into a CRUT with a 5% payout rate and an investment strategy yielding 7% annually.
In Year 1, the donor receives $50,000 (5% of $1M). Because the trust earned 7% ($70,000), the trust value grows to $1,020,000 after the payout. In Year 2, the donor receives 5% of the new value ($1,020,000), which is $51,000. Over time, both the income stream and the final gift to charity can increase significantly.
Disclaimer: This calculator is for educational and illustrative purposes only. It does not calculate the specific charitable income tax deduction, which requires complex actuarial calculations based on IRS Section 7520 rates and mortality tables. Always consult with a qualified tax attorney or financial advisor before establishing a charitable trust.