Charitable Trust
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Charitable Trust
An irrevocable trust into which the grantor deposits assets, with at least some of the proceeds going to a charity. There are two types of charitable trusts. In a charitable lead trust, the income from the investment of the assets in the trust goes to a designated charity for a certain period of time. After that time expires, the remainder of the assets and income are given to the trust's beneficiaries. In a charitable remainder trust, the income from the assets goes to the beneficiaries for a certain period of time, after which the assets themselves are donated to charity. In the United States, both types of charitable trust receive favorable treatment for estate tax purposes.