Charitable Remainder Trust: How It Works and Who Uses It

When you set up a charitable remainder trust, a legal arrangement where you transfer assets to a trust that pays you (or someone else) income for life, then gives the rest to charity. Also known as a CRT, it’s not just for the ultra-rich—it’s a smart tool for anyone who wants to support causes they care about while keeping income and cutting taxes. You don’t have to give everything away upfront. Instead, you put money or property into the trust, and it pays you a steady income—either a fixed amount or a percentage of the trust’s value each year. After you or your named beneficiary passes away, whatever’s left goes to the charity you picked. That’s the "remainder" part.

This isn’t just about giving. It’s also about control. A charitable trust, a broader category of legal structures designed to hold and manage assets for charitable purposes, lets you decide exactly how your money is used. You can choose which charity gets the final gift—whether it’s a local food bank, a national environmental group like Greenpeace, or a hospital you believe in. And because the trust is tax-exempt, you often get an immediate income tax deduction when you fund it. Plus, you can avoid capital gains tax if you donate appreciated assets like stocks or real estate. That means you don’t pay tax on the profit when the trust sells them. It’s one of the few ways you can turn a big gain into a big gift without a big tax bill.

People use these trusts for more than just tax breaks. They use them to simplify their estate planning, the process of arranging how your assets will be managed and distributed after your death. If you’ve got a complicated estate, a charitable remainder trust can help you avoid probate, keep your affairs private, and make sure your values live on. It’s also a way to replace lost income if you’re retiring and want to downsize your home or sell a business. Instead of cashing out and paying taxes, you roll it into a trust that pays you monthly. And if you’re worried about leaving money to family who might not manage it well, this lets you pass on your values—not just your wealth.

What you can do with a charitable remainder trust? You can fund it with stocks, real estate, even a small business. You can name your spouse, a child, or even a friend as the income recipient. You can pick any qualified charity as the final beneficiary. And you can structure it to pay you for life, or for a fixed number of years—up to 20. The key is that the charity gets something at the end, and you get something now. It’s a balance. Not charity with no return. Not wealth with no purpose. A real exchange that helps you and helps others.

Below, you’ll find real examples of how people use these tools, what they cost, how they compare to other giving methods, and what happens when they go wrong. Whether you’re thinking about setting one up or just want to understand how the wealthy give smarter, these posts cut through the jargon and show you what actually matters.