Charitable Remainder Annuity Trust

DEFINITION of 'Charitable Remainder Annuity Trust'

A type of gift transaction in which a donor contributes assets to a charitable trust which pays an annuity designed to leave a substantial proportion of the funds to charity upon termination of the annuity. The tax consequences of this transaction may be advantageous for contributing appreciated assets, due to differences involved in the taxation of charitable trusts.

BREAKING DOWN 'Charitable Remainder Annuity Trust'

The charitable remainder annuity trust is similar to other charitable annuities. However, the remainder trust has the advantage of being structured as a separate trust fund. This means that the charity cannot incur liability as a result of the annuity because the funds are in a separate legal structure.

RELATED TERMS
  1. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended ...
  2. Immediate Beneficiary

    A beneficiary designation most commonly used in charitable gift ...
  3. Gift Inter Vivos

    A gift given during the life of the grantor. Following a gift ...
  4. Charitable Donation

    A gift made by an individual or an organization to a nonprofit ...
  5. Charitable Split-Dollar Insurance ...

    Identical to a standard split-dollar insurance plan, except that ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that ...
Related Articles
  1. Home & Auto

    Using Life Insurance To Make Charitable Donations

    Your life insurance policy can be a great tool for charitable giving. Find out how.
  2. Taxes

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  3. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  4. Personal Finance

    7 Signs Of A Charitable Disaster Scam

    Make sure you know where your donations are going, and where they can be most effective.
  5. Budgeting

    It Is Better To Give AND Receive

    You give to benefit others, but there can be perks for you too.
  6. Estate Planning

    Estate Planning: 16 Things To Do Before You Die

    If you don’t plan your estate, your surviving family may have to deal with disputes and probate that were avoidable.
  7. Investing Basics

    The Top 4 Income Investments for Retirees in 2016

    These four investment types should mitigate risk in 2016 for retirees seeking income.
  8. Tax Strategy

    A Beginner’s Guide To Tax-Efficient Investing

    Tax-efficiency is a measure of how much of an investment’s return remains after taxes are paid.
  9. Fundamental Analysis

    3 Variable Annuities to Consider

    Discover three variable annuities to consider in your retirement portfolio. Read summaries of each annuity and the benefits they offer.
  10. Retirement

    The High Net Worth Guide to Medicare

    In the years ahead, wealthy seniors will pick up an even bigger part of the Medicare tab. However, there are ways to minimize the bill.
RELATED FAQS
  1. How do I file taxes for income from foreign sources?

    If you are a U.S. citizen or resident alien, your income (except for amounts exempt under federal law), including that which ... Read Full Answer >>
  2. Are Flexible Spending Account (FSA) items tax deductible?

    Flexible Spending Accounts (FSAs) are employer-sponsored, tax-favored savings plans expressly for the future reimbursement ... Read Full Answer >>
  3. Where else can I save for retirement after I max out my Roth IRA?

    With uncertainty about the sustainability of Social Security benefits for future retirees, a lot of responsibility for saving ... Read Full Answer >>
  4. Is dental insurance tax deductible?

    Dental insurance premiums may be tax deductible. To be deductible as a qualifying medical expense, the dental insurance must ... Read Full Answer >>
  5. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  6. Are Flexible Spending Account (FSA) contributions tax deductible?

    The contributions you make to your Flexible Spending Account (FSA) are not tax-deductible because the accounts are funded ... Read Full Answer >>
Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  3. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  4. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  5. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
Trading Center