CRT, short for charitable remainder trust, is an irrevocable split-interest trust that provides an income stream to noncharitable beneficiaries for life or a term of years, with the remainder going to charity. CRTs allow donors to contribute appreciated assets, diversify investments inside a tax-exempt trust, and receive an immediate income-tax deduction for the present value of the charitable remainder. Distributions to beneficiaries are taxed under a four-tier system that prioritizes ordinary income and capital gains. CRTs are often used to manage concentrated positions, supplement retirement income, and fulfill philanthropic goals in a tax-efficient way.

Advisors reference CRTs when discussing strategies for clients with large unrealized gains who want both income and charitable impact. They coordinate with attorneys to choose between CRAT and CRUT designs, set payout rates, and name charities. Life insurance outside the CRT may be used to replace wealth for heirs. CPAs model deduction amounts and distribution taxation over time. Understanding CRTs allows advisors to translate the abbreviation into a clear, client-friendly explanation and to integrate CRTs into broader legacy and income-planning discussions.