Charitable Remainder Trust

DEFINITION of 'Charitable Remainder Trust'

A tax-exempt irrevocable trust designed to reduce the taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and then donating the remainder of the trust to the designated charity.

BREAKING DOWN 'Charitable Remainder Trust'

The whole idea of a charitable remainder trust is to reduce taxes. This is done by first donating assets into the trust and then having it pay the beneficiary for a stated period of time. Once this time-frame expires, the remainder of the estate is transferred to the charities deemed as beneficiaries.

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RELATED FAQS
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    I have an inherited a trust fund. This is the first time I have considered pulling money from the account.  ... Read Answer >>
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    I want to create some kind of charitable trust to name as beneficiary on my stocks, funds, real estate and will. I have no ... Read Answer >>
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