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Charitable Remainder Trusts for Advisors and Their Clients

I design, model, and draft charitable remainder trusts. I do not manage assets, and I do not take over your client relationship. If you have a client sitting on a concentrated low-basis position, a business sale in progress, or appreciated real property that an exchange will not solve, a charitable remainder unitrust may leave the family with more wealth than selling outright — even after accounting for what passes to charity. Whether it does depends on the client's basis, life expectancy, payout rate, and state of residence, and on which alternative the client would otherwise pursue. That is a question with a number attached, and I run the number before recommending anything.

Established law practice. Drafting throughout California; advisory work nationwide alongside your client's own counsel. Everything runs remotely.

All of this in four pages, formatted to print and to keep.

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When to contact me

Concentrated position. A low-basis holding the client will not diversify because of what the sale would cost in tax — especially where a liquidity event is coming.

Business sale in progress. Call before a binding agreement exists. Once the deal is committed, the planning options narrow sharply. C corporation stock is the cleanest case; other entity types raise problems that are far easier to solve early than late.

Appreciated real property. Where an exchange does not solve it — the owner wants out of management, not into another building. Encumbered property is workable but needs early attention.

No charitable intent yet. Charitable inclination does not have to be present at the outset. It commonly develops once the client understands what the structure does, and its absence is not a reason to screen the client out.

This is not estate tax planning

Most complex irrevocable trusts exist to move value out of a taxable estate, which concerns very few clients at current exemption levels. A charitable remainder trust is income-tax driven — deferred gain on sale, a current deduction, a diversified income stream. It does not require a taxable estate to make sense, and it is in range for households well below one.

How the engagement works

Modeling and advisory. Charitable deduction, capital-gain deferral, projected income stream, remainder value, and whether the structure actually outperforms the alternatives for this client — delivered as a suitability analysis with win probabilities you can put in front of them.

Drafting and implementation. Trust drafting, trustee coordination, and funding sequence. California counsel for California clients; technical adviser working alongside counsel elsewhere. Advisory engagements stay advisory.

What stays with you

• The relationship. You introduce the matter and remain the client's adviser.

• The assets. A charitable remainder unitrust needs an investment manager. That is not a role I take, or one I compete for.

• The compliance work. The annual four-tier accounting, Form 5227, K-1s, and California Form 541-B stay with the client's CPA.

• The estate plan. If your client has an estate planning attorney, that attorney keeps the work. If they have none, I can handle it alongside the trust.

Representative structures

AssetStructure

Concentrated marketable securitiesA long-held, low-basis position the client will not sell outright — the archetypal case.

Pre-IPO equitySingle life with a twenty-year minimum term, funded in tranches as lockup restrictions release.

Accumulated RSUsTwo-life unitrust, coordinated with continued vesting.

Multi-unit residentialUnencumbered — FLIP-NIMCRUT with net-income makeup through the sale year.

Nonqualified deferred compensationTestamentary charitable remainder unitrust named as beneficiary of the plan.

What my published research found

A paired-path Monte Carlo study — ten thousand matched return paths — measuring how often a charitable remainder unitrust leaves the donor with more present-value wealth than the alternative. Published in the Journal of Financial Planning, August 2026.

Baseline client: a married couple, ages 63 and 65, California residents, funding $1 million of appreciated stock with a 20 percent cost basis at a 6 percent payout rate, with 20 percent annual portfolio turnover, measured across their joint life expectancy.

Every candidate already has an alternative — and there are three of them, not one

The right-hand column is how often the trust leaves the family better off than that alternative. What passes to charity is excluded from the family's side of the ledger, so the trust has to win on the family's own economics. Same couple throughout, valued on Table 2010CM.

AlternativeWhat the client does insteadTrust ahead

Hold and drawDraws the same income from the position and leaves the residue to heirs with a stepped-up basis. It replicates the income and preserves the corpus, which makes it the hardest case to beat.28.2%

Hold to deathKeeps the position, draws nothing, and passes it intact at death.57.8%

Liquidate and reinvestSells now, pays roughly $265,000 of tax on the gain at California rates, and reinvests the remainder.66.4%

Establishing which of the three the client would actually pursue comes before any modeling.

Four findings that change how a client should be screened

Longevity — 96.4%. Seven years of survival beyond the IRS table lifts that same couple from 28.2 percent to 96.4 percent against hold-and-draw. Basis is the threshold gate; longevity is the amplifier. A client screened on basis alone is misclassified.

Payout rate — six points. Defaulting to the 5 percent statutory minimum costs roughly six points of win probability against setting the rate at the 10 percent remainder-test ceiling. Win probability rises monotonically with the rate; there is no interior optimum.

§7520 rate — under five points. Moving the rate from 1.2 to 8.2 percent shifts the outcome by fewer than five points. Timing a trust to the rate table tunes a variable that barely matters — though the rate still binds on whether a payout and age clear the 10 percent test.

Domicile — 5% against 28%. The identical couple, at the worst case of no extra life expectancy, wins 5 percent of the time in a no-tax state against 27.7 percent in California. Recommendations calibrated to California overstate viability elsewhere.

What I verify myself

Regardless of whether I run the full suitability and feasibility analysis, I run the IRS compliance calculations — the charitable deduction and the 10% remainder test — at establishment and again at funding. The §7520 rate and the asset values move between those two dates, and a trust that qualifies in March can fail in September. I do not draft off figures I have not confirmed myself.

The engine behind the research

The Monte Carlo model in the Journal of Financial Planning paper is not a spreadsheet exercise. It is a production system — QuantiCRUT, built by me and operated by Proton Prep, Inc. — running ten thousand return paths against three benchmarks.

It is not a deduction calculator. It answers whether the client comes out ahead over the life of the trust, after accounting for what passes to charity.

The deduction calculator at calcrut.com is free and open to anyone. QuantiCRUT is at quanticrut.com.

Published work

• When Does a Charitable Remainder Unitrust Outperform? A Monte Carlo, Multi-Benchmark Suitability Framework. Journal of Financial Planning 39, no. 8 (August 2026): 60–79.

• Charitable Remainder Trusts, a Decade After the Last IRS Study. Tax Notes Federal 190, 1613 (March 9, 2026). The first analysis of Form 5227 microdata since the Service's 2014 study of filing year 2012.

• Opening the Black Box: The Actuarial Derivation of the CRUT Charitable Deduction. SSRN (May 17, 2026). DOI 10.2139/ssrn.5924942.

• Contributor, Kiplinger's Adviser Intel.

Credentials

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Admitted, United States Tax Court · LLM in Taxation, Golden Gate University · JD · MS, Johns Hopkins · MBA, Indiana University (Kelley) · Adjunct professor, Monterey College of Law — Wills & Trusts, Business Law · Super Lawyers Rising Stars, 2024–2027 (four consecutive years)

To start

Email a two-line description of the asset and the timeline. If it is a fit, we schedule a call. If it is not, I will tell you that in the reply.

Klaus Gottlieb, Esq.
klaus@wealthcarelawyer.com · (805) 703-2282
wealthcarelawyer.com · calcrut.com

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