Charitable Remainder Annuity Trust (CRAT) Charitable Remainder Annuity Trust (CRAT)
A type of charitable remainder trust that pays the trust's grantor a fixed, consistent income stream for his or her life or a term of years, and donates the remaining assets to a selected charitable beneficiary after the grantor's death. The assets placed in the trust are immediately tax-deductible. They pass on to a tax-exempt beneficiary without further tax consequences. However, income taxes are typically incurred on income received from the trust.