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What is a Charitable Remainder Trust?

A charitable remainder trust (CRT) is a trust that includes two separate and distinct “beneficial interests,” also known as “split interests.” This means that two different entities have an interest in the assets of the trust. These two interests are the “income interest” (income stream beneficiary) and the “remainder interest” (beneficiary of whatever assets remain at the termination of the trust). In a CRT, a non-charitable (family) beneficiary receives the income interest, and a charitable beneficiary receives the remainder interest. 

A properly drafted CRT can allow the creator of the trust to take a federal income tax deduction, as well as provide an income stream for life.