A Charitable Remainder Trust is an irrevocable trust in which the property or money that is put into the trust is donated to a charity, but the donor (called the grantor), or other beneficiaries designated by the grantor, continues to use the property and/or receive income from it while living.  The named beneficiaries of the CRT receive either a fixed annuity payment (Charitable Remainder Annuity Trust or CRAT) or a fixed percentage of the value of the trust (Charitable Remainder Unitrust or CRUT) and the charity receives the principal after a specified period of time.  Because the ultimate beneficiary of the trust is a charity, or charities, the grantor avoids paying any capital gains tax on the donated assets.  Charitable Remainder Trusts, because they benefit a charity, also qualify the grantor for an income tax deduction.  In addition, the trust assets pass outside of the grantor’s estate at death, reducing subsequent estate taxes that may be due.  While a Charitable Remainder Trust is irrevocable, the grantor may retain some control over the way the assets are invested, and may even change the charitable beneficiary over time, as long as an appropriate charity is always named. 

Our Estate Planning attorneys can help you determine whether a Charitable Remainder Trust is right for your situation.