Charitable Remainder Annuity Trust

A Charitable Remainder Annuity Trust (CRAT) is a Planned Giving vehicle defined in §664 of the United States Internal Revenue Code^[1] 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. When the donor dies, the remainder of the trust is transferred to the charity.^[2]

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, a bank or a financial advisor.