What is a charitable remainder trust?

Question: What is a charitable remainder trust?

Response: This type of trust is established for scientific, educational, religious or charitable purposes.  It is irrevocable and requires that the individual surrender legal control of the property.  First, an individual creates the trust and transfers the property that he or she seeks to donate to an IRS-approved charity, which in turn is designated the trustee and is in charge of managing or investing the property.  The individual or his or her designated beneficiary is then paid a percentage of the income that is produced by the trust property for a specific period of time or for the former's whole life.  Finally, upon that individual's death or at the termination of the period specified in the trust document, the property reverts to the charity.

Answered by Yara Zakharia

Additional Resource: Estate Planning Lawyers

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