Split-interest trusts, 2001

Statistics of Income Bulletin, Winter, 2003 by Melissa J. Belvedere

Split-interest trusts remained an increasingly popular option for planned giving in 2001. Overall, the number of split-interest trusts increased by 6.0 percent. Charitable remainder unitrusts remained especially popular (75.0 percent of all split-interest trusts). Yet the greatest numerical increase was for charitable lead trusts (15.8 percent). The vast majority of both charitable remainder annuity trusts and pooled income funds were small trusts with under $500,000 in book value of total assets (82.1 percent and 79.3 percent, respectively). Charitable remainder unitrusts were also skewed in favor of the small trusts, but not as strongly (68.7 percent). In contrast, the majority of charitable lead trusts were midsized trusts with between $500,000 and $3.0 million in book value of total assets (46.8 percent).

Of the total net income reported by charitable remainder annuity and unitrusts, net long-term capital gains was the largest component (83.4 percent and 84.1 percent, respectively). More interesting to note are the large changes in the amount of net short-term capital losses reported. Charitable remainder annuity trusts reported approximately $135.8 million in short-term capital losses for 2001, compared with only $15.1 million in losses for 2000. For charitable remainder unitrusts, the losses were even more pronounced--overall, unitrusts reported $389.6 million in short-term capital losses in 2001, compared with net long-term capital gains of $78.5 million in 2000.