Charitable Remainder Trust

Personal Finance

A Charitable Remainder Trust (CRT) is an irrevocable trust providing income to designated beneficiaries (often you, your spouse) for life or a set term, with the remainder going to charity. Donor receives immediate charitable income tax deduction for present value of the future charitable remainder. Two main types: Charitable Remainder Annuity Trust (CRAT — fixed dollar payments) and Charitable Remainder Unitrust (CRUT — fixed percentage of trust value, recalculated annually). CRTs enable highly appreciated asset diversification without capital gains tax — donate appreciated stock, trustee sells inside the trust (no tax), proceeds invest in diversified portfolio, distribute income to you. Best for wealthy with substantial appreciated holdings.