Charitable Remainder Trust (CRT)
Income to you or your beneficiaries now, with the remainder passing to charity.
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Overview & Purpose
An irrevocable trust that pays an income stream to one or more non-charitable beneficiaries for a period, after which the remaining assets pass to a designated charity. It may provide an income tax deduction and help diversify appreciated assets.
Who May Consider It
- You hold highly appreciated, low-basis assets and want to diversify without immediate capital gains.
- You want to support charity while retaining an income stream.
- May provide a partial federal income tax deduction for the charitable remainder interest.
- Can allow sale of appreciated assets inside the trust without immediate capital gains tax on the sale by the trust, subject to trust-level rules.
- Does NOT let you retain the principal — the remainder must go to charity.
- Does NOT guarantee a specific tax outcome; results depend on funding, payout structure, and applicable law.
Important Trade-offs
- Irrevocable; payout rates must meet IRS requirements (at least 5%, with a 10% minimum remainder value test).
Relevant Assets
State charitable trust and attorney general oversight rules may apply.
Questions to Discuss with an Attorney
- Is a CRUT (unitrust) or CRAT (annuity trust) better for my assets and income goals?
Related Documents
Sources & References
This article was prepared using publicly available legal and government sources. Laws change, and readers should verify current rules in their jurisdiction.
Reviewed for educational accuracy
Last reviewed: September 30, 2026 · Next scheduled review: March 2027
This article is educational information and is not legal advice. Laws vary by jurisdiction. No attorney has reviewed this material unless a named, licensed attorney is credited above.
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