Charitable Remainder Trust
A trust that provides income to you (or other beneficiaries) for a set period, after which the remaining assets go to a charity. It provides an immediate income tax deduction and can eliminate capital gains tax on appreciated assets.
Legal Definition
An irrevocable trust under IRC ยง664 that provides for a specified distribution to one or more non-charitable beneficiaries for life or a term of years, with the remainder interest passing to one or more qualified charitable organizations.
Practical Example
Helen transfers $1 million in appreciated stock to a charitable remainder trust. She receives annual income of $50,000 for life, gets an immediate tax deduction, and avoids capital gains tax on the stock. When she dies, the remaining trust assets go to her university.