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Estate Tax Income Forecast Estimator

This estimator forecasts cash income generated by an estate-related asset pool while separately projecting principal growth and annual withdrawals.

It can help compare income-producing portfolios or planning horizons when the goal is to understand both cumulative cash yield and the value that may remain in the estate. Income is calculated from each year’s opening balance using the entered yield, while withdrawals reduce principal and the remaining balance changes at the growth rate. An optional ending estate-tax estimate uses the entered exclusion and rate. The model is deliberately simplified and does not classify income for fiduciary or individual income-tax purposes.

Estate income forecast assumptions

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Result
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Cumulative projected asset income
Projected ending assets—
Total withdrawals—
Estimated ending estate tax—
After-tax ending estate—

1. Enter starting assets
Use the value of the asset pool whose income and future balance you want to forecast.

2. Set the income yield
Enter the annual cash yield used to estimate income from each year’s opening balance.

3. Set principal growth
Use a separate rate for appreciation or decline in the remaining principal.

4. Add annual withdrawals
Enter recurring outflows that reduce the projected balance.

5. Choose the forecast horizon
Select the number of years to model.

6. Set ending tax assumptions
Use the exclusion and estate-tax rate fields for a simplified tax estimate on the ending balance.

Annual income = Opening balance × Income yield
Ending balance = (Opening balance − Withdrawal) × (1 + Principal growth rate)
Cumulative income = Sum of annual income

Income is reported as cash generation and is not automatically added back to principal. The ending estate-tax estimate uses max(0, final balance − exclusion) × tax rate.

What the result means

The main result is the sum of modeled annual cash income generated by the asset pool over the forecast period.

Choose yield and growth assumptions carefully to avoid double counting the same expected return in both fields.

Given: $12,000,000 starting assets, 3% income yield, 2% principal growth, $200,000 annual withdrawal, 2 years.

Calculation: Year 1 income = $360,000. Year 1 ending assets = ($12,000,000 − $200,000) × 1.02 = $12,036,000. Year 2 income = $361,080.

Result: Cumulative two-year income = $721,080.

Interpretation: The forecast separates cash income generation from the principal value remaining for later estate planning.

What counts as estate income in this forecast?

The model treats the entered yield as cash income generated by the projected asset balance. It is a planning abstraction and does not classify interest, dividends, rents, or realized gains for tax purposes.

Is income reinvested?

The calculator reports generated income separately and grows the asset balance using the growth-rate input. To avoid double counting, choose assumptions that match how you intend to treat income and capital appreciation.

Can I model annual distributions?

Yes. Enter an annual withdrawal to reduce the balance before growth is applied. The forecast then shows both cumulative generated income and the remaining asset value.

Does this forecast estate tax each year?

No. It estimates estate tax only on the ending projected balance using the exclusion and tax-rate assumptions.

Why use a separate yield and growth rate?

Yield represents cash income while growth represents change in principal value. Keeping them separate helps model assets that produce income and appreciation at different rates.