What is a charitable remainder trust and how does it work?

A charitable remainder trust (CRT) lets you donate appreciated assets, receive income for life or a term of years, and leave the remainder to charity. You transfer assets – often highly appreciated stock or real estate – into the irrevocable trust, which can sell them without immediate capital gains tax. The trust then pays you (or another beneficiary) a stream of income, and whatever remains at the end goes to the charity you named. You get an upfront partial charitable income tax deduction based on the projected remainder, the assets leave your taxable estate, and you sidestep a big one-time capital gains hit on the sale. CRTs suit people with concentrated, low-basis assets who want income now and a charitable legacy later. They're complex and have ongoing administration costs, so they make sense mainly for substantial gifts.