A charitable remainder trust, or CRT, is a planning tool that can turn appreciated property into an income stream while providing a future gift to charity. It may appeal to someone who owns highly appreciated stock, real estate, or a business interest and wants to diversify or sell the asset without recognizing the entire gain immediately.
A CRT is not a way to eliminate taxes or keep complete control of property. The donor transfers assets to an irrevocable trust, receives payments for life or a set period, and names one or more qualified charities to receive what remains. The Internal Revenue Service (IRS) explains that the charitable remainder must be at least 10 percent of the initial value of the property placed in the trust.
