Life Expectancy Is Not a Guarantee
Our Client Services staff regularly takes client calls that go something like this: Client: I think your software is giving me the wrong deduction. PG Calc Client Services: Can you please explain what you mean? Client: Sure. My donor is 75 years old, so her life expectancy is 11.1 years using the 2000CM mortality table. I know the deduction calculation uses the 2000CM table but when I compute the deduction for a 5% unitrust with a fixed term of 11.1 years, I get a lower deduction than when I compute the deduction for the same unitrust that lasts for my donor’s lifetime. That doesn’t make sense! It does, actually. Let me explain.