Charitable Remainder Annuity Trusts (CRATs)

A Charitable Remainder Annuity Trust (CRAT) is an irrevocable trust that pays you a fixed dollar amount each year, either for a set term of years or for life, with the remaining trust assets passing to one or more charities you name at the end of the term. You can fund a CRAT with appreciated assets — such as stock, real estate, or a closely held business interest — without triggering immediate capital-gains recognition on the transfer. You also receive a partial charitable income-tax deduction in the year the trust is funded, based on the present value of the remainder interest ultimately passing to charity.

Because a CRAT's payout is a fixed dollar amount set when the trust is funded, it will not change even if the trust's assets grow or decline in value. Unlike a charitable remainder unitrust (CRUT), a CRAT does not accept additional contributions once it is funded — the initial contribution is the only one the trust can receive.

Families and individuals holding significant appreciated assets — including publicly traded or controlled stock, real estate, or closely held business interests — who want to avoid immediate capital-gains tax on a sale, generate a predictable income stream, and make a meaningful gift to charity often consider a CRAT. It's worth noting that certain asset types, such as debt-financed real estate or active closely held business interests, can raise unrelated business taxable income (UBTI) considerations that should be reviewed with your tax advisor before funding the trust.

By naming Crawford Trust as trustee, you gain a Nevada-based corporate fiduciary experienced in administering CRATs, working alongside your existing attorneys, CPAs, and financial advisors to carry out your charitable and income goals precisely as your trust document provides.