The charitable remainder trust (CRT) is often used by individuals holding assets that have experienced significant appreciation like stocks, real estate, or a business. It is an irrevocable trust designed to convert such assets into a lifetime income stream without generating capital gains taxes.

When you establish a CRT, you and/or a second beneficiary (e.g., spouse or another family member) receive income from the trust for life or for a term of up to 20 years. In addition, you receive an immediate income tax charitable deduction for your gift. Any capital gain from the asset utilized to fund the trust is averted, and the asset is eliminated from your estate for estate tax purposes. When the trust ends, the remaining assets pass to the qualified charity or charities of your choice.