A charitable trust is a trust used to benefit particular charities, institutions or the general public. Some popular charities include religious institutions, universities, medical research, and animal shelters. Charitable trusts are often eligible for preferential tax treatment. The tax treatment depends on the type of charitable trust and the amount of the donation.
Charitable Remainder Trusts
A charitable remainder trust is a trust that provides income or assets to a beneficiary during his or her life and leaves the remaining property for a charitable purpose.
Charitable Remainder Annuity Trusts (CRATs)
Charitable remainder annuity trusts are trusts where a beneficiary (or beneficiaries) receives a fixed payment of at least five percent of the fair market value of the principal for a fixed period of time. After this specific time period has ended, the property passes to a charity.
