Klaus Gottlieb recently published Choosing Between a CRAT and a CRUT – An Analytical Comparison of Charitable Deductions and Payment Rights, 2026. Provided below is the Abstract:
Charitable remainder annuity trusts and charitable remainder unitrusts respond differently to the section 7520 valuation rate. That difference can create a substantial deduction advantage for an annuity trust without establishing its superiority for the donor. This article explains the differential response through closed form valuation formulas, regulatory mortality weighting, and deterministic illustrations. Building on prior derivations of the unitrust deduction, it shows why assumed asset growth and discounting cancel, leaving the adjusted payout as the channel through which the valuation rate affects the unitrust remainder. It derives the deduction crossover under specified payment conventions and illustrates the result across valuation rates of 2 to 10 percent. Further illustrations distinguish actuarial values from usable tax savings and compare nominal income, purchasing power, and responses to investment losses. The analysis establishes valuation identities and conditional payment consequences; it does not estimate probabilities of economic outperformance. Its central implication is that a deduction advantage must be evaluated together with the payment rights, risks, and flexibility selected by the donor.