What is the primary purpose of a Charitable Remainder Trust?

A Charitable Remainder Trust (CRT) is designed primarily to benefit charitable organizations after the grantor's death. The structure of a CRT allows the grantor to transfer assets into the trust, providing income to the grantor or other beneficiaries for a specified period or for the life of the beneficiary. After this income period ends, the remaining assets in the trust are distributed to one or more designated charitable organizations.

This mechanism serves a dual purpose: it allows individuals to receive income while they are alive and contributes significantly to philanthropy upon their passing. Because the charitable remainder is mandatory and the assets must eventually go to a charity, the design of the trust inherently prioritizes charitable giving as its core function, thus fulfilling its primary purpose.

The other options focus on transferring wealth to heirs or managing investments, which are not the fundamental objectives of a CRT. While it can provide income during the grantor's lifetime, that aspect supports the charitable intentions rather than being the main goal. Ultimately, the focus remains on benefiting charitable causes, underscoring the importance of charitable giving and estate planning in a structured manner.