When Thinking Lead Trusts, Don’t Forget State Taxes
Charitable lead trusts, as we know them today, were created in the Tax Reform Act of 1969. It didn’t take long after that for sophisticated estate planners and planned giving officers to recognize that charitable lead trusts offered wealthy donors a great way to provide for heirs, make a generous charitable gift, and potentially save a lot of taxes in the process.
When the Tax Reform Act of 1969 was passed, the federal estate tax exemption was just $60,000. Any estate larger than $60,000 would owe federal estate tax. Fast forward to 2026. The federal estate tax exemption is now $15 million per person, $30 million per married couple. Fewer than one in 1,000 estates closed in 2026 will owe any federal estate tax. For these estates, the charitable lead trust still offers a way to reduce federal estate tax.
What about the other 999 estates? Can the charitable lead trust provide them with any tax benefit? As with many things in life, it depends!
Quick Tip: Why You Can’t See Your Search Results in PGM Anywhere
From the Blog: Respect for the Deceased – Your Final Obligations When a CGA Terminates at Death
Mortality and Life Expectancy are NOT the Same
ACGA Announces Rates Will Continue to Remain the Same
Gearing Up for Reunion? Add Impact to Your Next CGA Mailing with BatchCalcs
Hone Your Planned Giving Knowledge This Summer in Boston
On the Road Again – Find PG Calc at a Conference This Spring
PG Calc Webinar: Practical Uses of AI in Gift Planning (and Everyone Else Who Juggles Too Much)
This session offers a practical, real-world look at how AI can become a reliable partner in your daily workflow and accelerate project timelines. We’ll focus on how AI can take on the drafting, organizing, and structuring work that slows you down. Whether you’re new to AI or already experimenting, you’ll leave with a clear game plan to supercharge your workday while keeping the human touch.
Quick Tip: Why You Can’t See Your Search Results in PGM Anywhere
PGM Anywhere has a number of ways to search for saved proposals: case name, donor name, assignment, date range, and even notes added to the proposal. But what happens when you click the Search button and nothing appears?
The most likely culprit is that your browser window is not tall enough for the search results to be visible. This is often the case when running PGM Anywhere on a laptop. The solution – scroll down. You can do this by dragging down the light gray scroll bar on the far right of the window or by spinning your mouse wheel toward you. Scrolling down will reveal the results of your search!
If you have questions, reach out to Client Services at 888-474-2252 or support@pgcalc.com.
From the Blog: Respect for the Deceased – Your Final Obligations When a CGA Terminates at Death
While some charitable gift annuities (CGAs) are voluntarily terminated by annuitants, either for a charitable deduction or a lump sum payout, the vast majority of CGAs terminate with the death of the final annuitant. When this happens, the charity must fulfill their final contractual obligation to the CGA’s donor, which is to distribute the residuum to the charitable purpose. Here’s our recommended list of steps that should be completed before releasing the gift.
The concepts of “mortality” and “life expectancy” are often misunderstood or even used interchangeably. It is important to distinguish between them, however, since both play a role in planned gift calculations.
Mortality is a prediction of how many people out of an original population are expected to survive at each age. For example, the 2010CM mortality table that is used in charitable deduction calculations for gift annuities, charitable remainder trusts, and other split-interest gifts, starts with a population of 100,000 at age 0 and predicts how many of those 100,000 will be alive at each subsequent age. The table ends at age 110, at which point it predicts 0 survivors will remain.
We can use a mortality table to compute the likelihood that someone will live to any older age. Simply divide the number of survivors at the older age by the number of survivors at the person’s current age. In this way, for example, we can compute the likelihood that an 80-year-old gift annuitant will live to receive annuity payments in any future year. Computing these probabilities is an essential part of calculating the deduction for a gift annuity. Notice that the deduction calculation does not entail computing a life expectancy.
What is a life expectancy, then? A person's life expectancy is the specific length of time the person is expected to live, on average, given their current age. For example, a person with a life expectancy of 10 years has a 50% chance of living less than 10 years and a 50% chance of living more than 10 years. Life expectancies are computed using a mortality table, but they are not the same as mortality. In the world of planned giving, the number of years an annuitant can receive tax-free income from a gift annuity is a life expectancy calculation. It is the life expectancy of the annuitant. Per Treas. Reg. §1.72-9, it is computed using the 1983 Basic mortality table.
ACGA Announces Rates Will Continue to Remain the Same
On April 7th, the American Council on Gift Annuities (ACGA) confirmed in an email to its membership that it will be maintaining its current suggested maximum annuity rates for charitable gift annuities (CGAs). The ACGA explained that its decision reflects the recent stability of interest rates, noting that the yield on U.S. Treasury 10-Year securities has changed very little in the past 9 months.
The ACGA continuously monitors market performance and is prepared to adjust its suggested maximum rates whenever appropriate. You will find links to the ACGA’s current suggested maximum rates and the assumptions underlying them here. The current ACGA rates went into effect on January 1, 2024.
Gearing Up for Reunion? Add Impact to Your Next CGA Mailing with BatchCalcs
Are you planning a mailing to your gift annuity prospects this summer or fall? Conveying the benefits of a gift annuity to your donors can be difficult. That’s where PG Calc’s BatchCalcs service comes in.
With the help of BatchCalcs, your mailing can include a gift amount tailored to each prospect, along with the deduction, annuity amount, and tax-free portion they can expect. We can provide you with just the BatchCalcs data or create print-ready letters and/or Summary of Benefits charts for each prospect.
Hone Your Planned Giving Knowledge This Summer in Boston
Come to Boston August 5-6 for our in-person trainings: Gift Planning with PGM Anywhere Introductory and Advanced. These hands-on trainings are a great opportunity to develop your planned giving knowledge and PGM Anywhere software skills to close more gifts. We offer both introductory and advanced classes, and you can choose either or both.
August 5 Introductory Session: We use case studies to introduce planned giving concepts, covering immediate and deferred gift annuities, remainder trust basics, and gifts made utilizing the IRA QCD provision for CGAs.
August 6 Advanced Session: Explore advanced gift plans including flip CRUTs, retained life estates, charitable lead trusts, and gift plans using funds from traditional IRAs.
On the Road Again – Find PG Calc at a Conference This Spring
It's not just the flowers that start blooming in spring. It's also the beginning of the regional planned giving conference season. We hope you'll seek us out when we are at a conference near you! Here's where we'll be:
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