Charitable Remainder Unitrust (CRUT)

A Charitable Remainder Unitrust (CRUT) is a type of irrevocable trust that provides financial benefits to both the donor and a charitable organization. In a CRUT, the donor transfers assets to the trust, and the trust pays a variable annual amount, based on a fixed percentage of the trust’s annually revalued assets, to one or more non-charitable beneficiaries (such as the donor or their family) for a specified term or the lifetime of the beneficiaries. After the trust term ends, the remaining assets, known as the “remainder interest,” are distributed to one or more designated charitable organizations.

CRUTs offer significant tax advantages, including an immediate charitable income tax deduction based on the value of the remainder interest, deferral of capital gains taxes on appreciated assets contributed to the trust, and potential reduction in estate taxes. They are particularly appealing to donors who want to support a charitable cause while retaining a variable income stream.