Trust & Estate Litigation · Haute Lawyer Network
What Is a Charitable Trust?
Last reviewed: October 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. A charitable remainder trust is itself exempt from income tax, so it can sell appreciated assets without paying tax at the trust level; payments to you are taxed under the four-tier rules. See What is a charitable remainder trust? on Haute Lawyer.
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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