With a CRT, you can make a donation to your favorite charity and avoid capital gains taxes on highly appreciated assets. You can receive a regular income from the trust for a set period or your lifetime. Afterward, the assets remaining in the trust are given to the charity. The assets you transfer to the trust may be partially tax deductible, and any appreciated assets sold by the trust are exempt from current capital gains.

Keep in mind that donations to both types of trusts are irrevocable; therefore, the assets cannot be withdrawn once the trusts are formed. Not all charitable organizations are able to use all possible gifts, so it is prudent to check first. The type of organization you select can also affect the tax benefits you receive.

The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate conservation professional and your legal and tax advisors before implementing such strategies.

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