What it is
A charitable remainder trust (CRT) is an irrevocable trust. You transfer assets into it, the trust pays income to you or other named beneficiaries for a set period or for life, and whatever remains goes to one or more charities you choose.
A charitable remainder unitrust (CRUT) pays a fixed percentage of the trust's value, revalued periodically, so payments can rise or fall with the trust's value. A charitable remainder annuity trust (CRAT) pays a fixed dollar amount set when the trust is created, so payments stay level.
In an income-for-life design, the payments continue for the lifetime of one or more people, often the donor and a spouse. Other designs use a fixed term of years. Each choice affects payments, the eventual charitable gift and the rules that apply, so details matter.
How it’s traditionally been approached
People have traditionally used charitable remainder trusts when they own an asset that has grown in value, such as stock or real estate, and are considering a sale. Because the trust, rather than the individual, sells the asset, the approach is often discussed in connection with how capital gains are handled.
Some people use these trusts to turn a concentrated or low-income asset into a diversified income stream, or to support retirement cash flow while still leaving a legacy. Others like that the charitable gift is planned in advance rather than left to chance.
Like every tool, it involves trade-offs. The trust is generally irrevocable, it has setup and administration requirements, and the money that goes to charity is not available to heirs. Some families pair it with other planning to address that, and others choose different giving vehicles entirely.
How the right planner may help
A planner experienced in charitable giving, often working with an estate planning attorney and CPA, may help you understand whether a charitable remainder trust fits your goals at all. They may walk through how a CRUT and a CRAT differ, how payout choices work and what happens to the assets at the end.
A first visit is generally a conversation. Expect questions about the assets you hold, your income needs, your family, the causes you care about and your timeline. You may be asked for background on how and when you acquired the asset you're considering.
Good questions to bring: Is this trust right for my situation compared with alternatives? Who serves as trustee and what does that cost in time and fees? What happens if my needs change? How would this interact with my estate plan? Which professionals will confirm current rules and figures for me?
The bigger picture
Decisions about giving and income carry emotional weight. Setting up an irrevocable trust can bring a sense of purpose and clarity for some people, and for others it raises worries about flexibility, family expectations or running short later. Naming those feelings early can make planning conversations more useful.
Peace of mind often comes from feeling informed and unhurried. Talking with family about your intentions, and taking time to compare options, may help the decision feel aligned with your values. If you're looking for broader support with wellbeing, Providers.plus may be a helpful resource.
Keep in mind
- Charitable remainder trusts are generally irrevocable, so changing your mind later may be limited or not possible.
- Tax rules, deduction limits, payout requirements and valuation rules change over time and vary by person. Confirm current figures with your own CPA or estate planning attorney.
- This page is general education, not tax, legal, investment or financial advice, and it does not recommend any trustee, sponsor or charity.
- Outcomes are never guaranteed, and a trust that suits one person may not suit another.
Planners
We’re welcoming founding planners for charitable remainder trusts now. Get matched or list your practice.
Frequently asked questions
What is a charitable remainder trust?
A charitable remainder trust is an irrevocable trust that pays income to you or other beneficiaries for a period or for life, then gives the remaining assets to charity. It is a charitable giving tool some people consider when they hold appreciated assets. Whether it fits depends on your situation, so review it with your own professionals.
What is the difference between a CRUT and a CRAT?
A CRUT pays a set percentage of the trust's value, revalued periodically, so payments can change. A CRAT pays a fixed dollar amount determined at the start, so payments stay level. Each has different rules and trade-offs, which a CPA or estate planning attorney can explain.
Can a charitable remainder trust provide income for life?
Yes, a charitable remainder trust can be designed to pay income for the lifetime of one or more people. Others use a fixed number of years instead. The design you choose affects payments and the eventual charitable gift.
Does a charitable remainder trust avoid capital gains tax?
Not necessarily in a simple sense. Because the trust sells the asset, the gain is generally handled differently than if you sold it yourself, and payments to you may carry tax consequences over time. Ask your CPA how this would work for you, since rules change and outcomes are not guaranteed.
Can I change or cancel a charitable remainder trust?
Generally, no. These trusts are typically irrevocable, so the structure is hard to change once funded. Some designs allow limited flexibility, such as changing the charity, so discuss options with an estate planning attorney before you commit.
Who should I talk to about a charitable remainder trust?
Many people work with an estate planning attorney to draft the trust, a CPA for tax questions and a charitable giving planner to coordinate goals. Together they may help you decide whether this approach suits you. Always confirm current rules and suitability with your own professionals before acting.
Educational resource. Charitable Financial Planning shares general information and connects people with independent planners. It is not professional advice. Talk with a qualified professional about your own situation.