A Charitable Remainder Annuity Trust (CRAT) is a Planned Giving vehicle defined in §664 of the United States

Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...

that entails a donor placing a major gift of cash or property into an irrevocable trust. The trust then pays a fixed amount of income each year to the donor or the donor's specified

beneficiary A beneficiary (also, in trust law, '' cestui que use'') in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the person ...

. When the donor dies, the ''remainder'' of the trust is transferred to the charity. Charitable trusts such as a CRAT require a trustee. Sometimes the charity is named as trustee, other times it is a third party such as an

attorney Attorney may refer to: * Lawyer ** Attorney at law, in some jurisdictions * Attorney, one who has power of attorney * ''The Attorney'', a 2013 South Korean film See also * Attorney general, the principal legal officer of (or advisor to) a gove ...

, a bank or a financial advisor.

References

{{Charity Charity in the United States Taxation in the United States Wills and trusts