Trust & Estate Litigation · Haute Lawyer Network
What Is a Charitable Trust?
Last reviewed: June 2026
A charitable trust is a trust that serves a charitable purpose — education, religion, relief of poverty, advancement of the arts and sciences, or any purpose that benefits the public. Unlike private trusts that benefit specific individuals, charitable trusts benefit the public or a charitable organization.
Charitable trusts can serve dual purposes — benefiting both the grantor or their heirs and a charity — through split-interest trust arrangements. The two most common forms are the Charitable Remainder Trust (CRT) and the Charitable Lead Trust (CLT).
A Charitable Remainder Trust provides income to the grantor or other non-charitable beneficiaries for a period, with the remainder passing to charity at the end of the term. It provides a partial charitable deduction in the year of contribution.
A Charitable Lead Trust provides income to charity for a period, with the remainder passing to non-charitable beneficiaries — typically family members — at the end. It is used to pass assets to heirs with reduced gift and estate taxes.
Frequently Asked Questions
What are the tax benefits of a charitable remainder trust?
The grantor receives a partial charitable deduction in the year of contribution based on the present value of the remainder interest. Highly appreciated property can be contributed without triggering capital gains tax on the contribution — the trust sells it tax-free and uses the proceeds to fund the income stream.
How much income does a CRT pay?
A CRAT (Charitable Remainder Annuity Trust) pays a fixed dollar amount annually. A CRUT (Charitable Remainder Unitrust) pays a fixed percentage of the trust's annual value — so the payout fluctuates with investment performance.
What charity can receive the remainder of a charitable trust?
Any IRS-qualified public charity or private foundation. The charity must be designated at the time the trust is created and can be changed later in some types of trusts.
What is a donor-advised fund versus a charitable trust?
A donor-advised fund is a simpler charitable vehicle — you contribute assets, receive an immediate deduction, and recommend grants to charities over time. A charitable trust is more complex, provides income to non-charitable beneficiaries, and involves ongoing trust administration.
Can a charitable trust be revoked?
Generally no. Charitable trusts are typically irrevocable — once you contribute assets, you cannot take them back. This irrevocability is part of what entitles the contribution to a charitable deduction.
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