PG Calc’s PGM Anywhere gift illustration software offers the ability to run projections for charitable remainder trusts that provide an estimate of the long-term outcome of the gift arrangement. Based on a number of input assumptions, the gift planning professional can give the prospective donor a reasonable idea of what is possible over time. None of the future numbers are guaranteed, of course, but modeling can serve as a useful tool in framing the overall picture.

While the long-range estimates can be helpful for a donor – and for his or her advisors – the process sometimes results in a number of questions. One of the most consequential questions we hear regarding the trust projections in PGM Anywhere is why the charitable deduction is so much smaller than the projected remainder amount. We generally refer to the deduction as the estimated value of the gift to the charity, but that is also how we explain the projected remainder amount. In some cases, the two numbers can be worlds apart. If they represent essentially the same concept, how can we see two numbers so dramatically different? Let’s take a look at what is behind the numbers.