What are the different kinds of charitable trusts? | Charitable Lead Trusts vs Charitable Remainder Trusts

Article written by Illinois Attorney Kevin O’Flaherty

In this article, we answer the question: what are the different kinds of charitable trusts? We explain the difference between charitable lead trusts, charitable remainder trusts, and donor-advised funds. We also discuss the difference between a fixed annuity charitable remainder trust and a charitable remainder unitrust.

For some foundational information about charitable trusts, check out our article: Charitable Trusts Explained.

What is the Difference Between Charitable Lead Trusts and Charitable Remainder Trusts?

There are two main types of charitable trusts — charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). They differ primarily by how the trusts’ incomes are allocated.

What is a Charitable Lead Trust?

Charitable lead trusts give a set amount of the trust’s income to a charitable organization, and then the remaining income either goes to the grantor’s beneficiaries or stays in the trust. CLTs are a great giving strategy when you don’t need a set amount of additional income, and your…