Charitable remainder trust (CRT) is an irrevocable trust that provides an income stream to noncharitable beneficiaries"often the grantor and spouse"for life or a term of years, with the remainder passing to charity at the end of the term. CRTs are tax-exempt entities; appreciated assets contributed to them can be sold without immediate capital-gains tax, with beneficiaries instead taxed on distributions under a tiered system. Donors receive a current income-tax deduction for the present value of the remainder interest going to charity. CRTs are frequently used to diversify concentrated holdings, supplement retirement income, and support philanthropic goals.

Advisors propose charitable remainder trusts for clients with highly appreciated assets who want ongoing income and charitable impact. They coordinate with attorneys to choose between annuity (CRAT) and unitrust (CRUT) structures, set payout rates, and select remainder charities. Life insurance outside the CRT may be used to replace charitable gifts for heirs. Advisors work with CPAs to model income-tax deductions, distribution taxation, and estate impacts. Understanding charitable remainder trusts helps advisors deliver sophisticated solutions that combine tax efficiency, income planning, and philanthropy in one structure.