What's the difference between a CRT and a regular charitable donation?

With a regular donation, you give money away and get a deduction. With a CRT, you transfer assets to an irrevocable trust, get a partial deduction now, receive income for life (or a set term), pay no capital gains on the transfer, and the remainder goes to charity. It's giving and receiving at the same time.

How much income will I receive from a CRT?

The trust must distribute between 5% and 50% of trust value annually. Most CRTs are set at 5-8%. A $1M CRT at 6% would pay you roughly $60,000/year, with the amount adjusting if it's a unitrust (CRUT) or staying fixed if it's an annuity trust (CRAT).

What happens to the assets when the CRT ends?

The remaining trust assets go to the charity or charities you designated when you created the trust. This is why it's called a "remainder" trust - charity gets the remainder.

Can I change the charity after creating the CRT?

In most cases, yes. Many CRTs are drafted to allow the grantor to change the charitable beneficiary. This gives you flexibility if your philanthropic interests evolve.

Who should consider a CRT?

CRTs are generally used by people with highly appreciated assets ($500K+) who want to diversify without a large immediate tax hit, generate income, support charity, and reduce estate size. Common assets used: appreciated stock, real estate, or a business being sold.

Charitable Giving

Charitable Remainder Trust (CRT)

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advanced · $500K+

Transfer appreciated assets to an irrevocable trust, get immediate tax deduction, receive income for life (5-50% of trust value annually), pay no capital gains on transfer, and remainder goes to charity.

Used by ultra-wealthy for generational planning.

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Key takeaways

You transfer appreciated assets to an irrevocable trust, avoid capital gains on the transfer, and receive income for life or a set term.
The trust must pay out 5-50% of its value annually; the remainder goes to charity at the end.
You get a partial income-tax deduction now for the projected charitable remainder.
It is irrevocable, so the principal cannot be taken back.

CRAT vs. CRUT

	Annuity trust (CRAT)	Unitrust (CRUT)
Payout	Fixed dollar amount	Fixed % of value, recalculated yearly
If the trust grows	Payment stays the same	Payment rises
Additional contributions	Not allowed	Allowed

General mechanics, not a recommendation. Both require an estate planning attorney.

Requirements

Highly appreciated assets ($500K+)
Charitable intent
Estate planning attorney required

How to Implement

1Consult estate planning attorney and CPA
2Establish CRT with charitable beneficiary
3Transfer appreciated assets to CRT
4Receive income payments annually (5-50% of trust)
5At death or term end, remainder goes to charity

The bottom line
A CRT converts an appreciated asset into an income stream while supporting charity and avoiding capital gains on the transfer. It is irrevocable and complex enough to require an attorney and CPA.

Frequently Asked Questions

Minimum Investment

$500,000+ typically

Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.

Last reviewed: April 2026

Related charitable giving strategies

Donor-Advised Fund (DAF)Donate appreciated stock, avoid capital gains tax, get immediate deduction, grant to charities over time.Qualified Charitable Distribution (QCD)Age 70.5+? Send IRA money directly to charity tax-free, without it counting as taxable income.Charitable Remainder Unitrust (CRUT)Transfer appreciated assets, receive variable income for life, charity gets remainder.

Sources

Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits

Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.