Full Definition
A Charitable Remainder Trust (CRT) is an irrevocable trust that provides income to the donor (or other beneficiaries) for a specified period or for life, with the remaining trust assets passing to a designated charity upon termination. CRTs offer multiple tax benefits: an immediate income tax deduction for the charitable remainder interest, tax-free sale of appreciated assets contributed to the trust (avoiding capital gains), and estate tax reduction. CRTs are commonly used with appreciated real estate, concentrated stock positions, and business interests. Wealth Replacement Trusts using life insurance are frequently paired with CRTs to replace the donated assets for heirs.
Explore More