July 15, 1999 | Read Time: 1 minute
Americans reported to the Internal Revenue Service that they held more than 82,000 charitable remainder trusts in 1997, with a total fair market value of $60.5-billion, according to newly compiled data from the tax agency.
The figures, which are the latest available, point to significant growth in trust assets in recent years.
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In 1994, the fair market value of assets in charitable trusts totaled $29.7-billion, less than half the 1997 sum.
Assets in four main types of planned gifts — charitable remainder annuity trusts and unitrusts, charitable lead trusts, and pooled-income funds — totaled $72.6-billion in 1997.
In a charitable remainder trust, a donor gives cash, stock, real estate, or other assets to a charity, which invests the gift. In exchange, the charity provides regular payments to the donor, a beneficiary, or both. When the donor and any beneficiaries die, all the assets in the trust go to the charity.
Charitable lead trusts and pooled-income funds also showed substantial growth. The number of lead trusts reported by donors rose 21 per cent from 1994 to 1997, and asset values rose 49 per cent. The number of pooled-income funds rose about 5 per cent, while assets rose 49 per cent.
In a lead trust, donated assets are invested and a percentage is paid to charity for a period of years, after which the remainder goes back to the donor or a beneficiary. In a pooled-income fund, charities invest assets from a large number of donors, who receive a share of the earnings. When donors die, the money they have left in the pooled fund goes to the charity that manages it.
