SYSTEM AND METHOD FOR MAXIMIZING AFTER-TAX INCOME USING SPLIT METHOD CHARITABLE REMAINDER TRUSTS

摘要

A system and method are disclosed for maximizing after-tax income from charitable remainder trusts, An evaluation service establishes a first charitable remainder trust (CRT-1) that generates ordinary income from fixed income investments and a second charitable remainder trust CRT-2 that generates growth income from equity investments. The evaluation service further identifies a qualifying charitable organization. The evaluation service integrates an income beneficiary risk tolerance t_b, a qualifying charitable organization risk tolerance t_c, and a grantor weight w to generate an integrated risk tolerance t_i. Each risk tolerance specifies a ratio of assets that are allocated to generating ordinary income from fixed income investments and the grantor weight is a number between zero and one that increases as the income beneficiary's risk tolerance is favored. The evaluation service further distributes t_i of a grantor's assets to the CRT-1 and 1−t_i of the grantor's assets to the CRT-2.