Charitable Remainder Trust Attorney in Austin, TX: CRTs and CLTs

Charitable Remainder Trusts and Charitable Lead Trusts in Texas

If giving to charity is part of your plan, a charitable remainder trust or charitable lead trust can turn that giving into a tax strategy. The right structure can let you sell highly appreciated assets without immediate capital gains tax, create an income stream for life, and reduce estate tax, while your favorite causes receive a meaningful gift.

Reviewed by Turner Henington, attorney and former KPMG tax accountant, Texas Bar No. 24148206 · Updated November 2026

How a Charitable Remainder Trust Works

• Two types. A charitable remainder annuity trust (CRAT) pays a fixed dollar amount each year. A charitable remainder unitrust (CRUT) pays a fixed percentage of the trust’s value, recalculated each year.
• Payout rules. The payout must be at least 5% and no more than 50% each year, and the projected value going to charity must be at least 10% of the initial value (26 U.S.C. § 664).
• Selling appreciated assets. A CRT itself pays no income tax, so it can sell appreciated stock, real estate or a business interest and reinvest the full proceeds. You pay tax over time as you receive payments.
• Income tax deduction. You receive a charitable deduction for the present value of the charity’s remainder in the year you fund the trust (26 U.S.C. § 170).

A charitable remainder trust is common before the sale of a business or real estate, and for retirees who want to turn a concentrated, low-basis stock position into a diversified income stream.

Charitable Lead Trusts

A charitable lead annuity trust (CLAT) pays a charity a fixed amount for a set number of years. The value of those payments is deducted from the gift or estate tax value of the transfer (26 U.S.C. § 2522; 26 U.S.C. § 2055). If the trust’s investments grow faster than the IRS’s assumed rate, the excess passes to your children or a trust for them free of transfer tax. CLATs suit families with significant charitable goals and larger estates.

Simpler Charitable Options

• Leave retirement accounts to charity. IRAs and 401(k)s are fully taxable income to children who inherit them, but a charity pays no income tax. Naming a charity as beneficiary of retirement accounts, and leaving other assets to family, is often the most tax-efficient gift.
• Donor-advised funds. A simple way to take a deduction now and recommend grants over time.
• Private foundations. For families who want lasting control and family involvement, at the cost of more administration.

Texas Points

Charitable trusts are not subject to the Texas rule against perpetuities (Tex. Prop. Code § 112.036), so a charitable gift can be permanent, such as a scholarship fund. The Texas Attorney General has a role in protecting the public’s interest in charitable trusts (Tex. Prop. Code ch. 123), which matters if a charitable trust ever needs to be changed.

How We Help

We help you choose between a charitable remainder trust, a lead trust, a donor-advised fund or a beneficiary designation, draft the trust, and coordinate with your financial advisor, CPA and the charity. See the estate tax planning overview for related strategies.

Why Work With Us

• Tax background. Turner Henington is a former KPMG tax accountant, so we design trusts with both the estate tax and your family’s income tax in mind.
• We work with your CPA and advisor. Marital and bypass trust decisions often happen after a death, on the estate tax return, so we coordinate with the people who prepare it.
• Flat-fee quotes. After a free consultation, you get a written flat-fee quote before any work starts.
• We also handle the first death. Funding these trusts and making the elections is part of settling the estate, and we handle both the planning and the administration.

Talk to an Estate Tax Planning Attorney

Call (512) 737-8404, book a free consultation, or send us a message below.

What Our Clients Say

Charitable Remainder Trust FAQ

Can I be the trustee of my own charitable remainder trust?

Often yes, though hard-to-value assets such as real estate or closely held stock usually require an independent trustee or appraiser for valuation.

Can a charitable remainder trust help when I sell my business or rental property?

Yes. If the asset is transferred to the CRT before a binding sale, the trust can sell it without immediate capital gains tax and reinvest the full proceeds to pay you an income stream.

What is the easiest way to leave money to charity?

Naming a charity as beneficiary of an IRA or other retirement account. The charity pays no income tax on it, while your family would have.

Other Estate Tax Planning Tools

• Estate tax planning in Austin: overview
• Bypass (credit shelter) trust
• Marital trust
• QTIP trust
• Reverse QTIP election
• Spousal lifetime access trust (SLAT)
• Irrevocable life insurance trust (ILIT)
• Dynasty trust and GST planning
• Disclaimer trust
• Grantor retained annuity trust (GRAT)
• Portability: keeping a deceased spouse’s unused exemption
• Lifetime gifting in Texas

This page is general information, not tax or legal advice for your situation. Reading it does not create an attorney-client relationship.