When a donor funds a charitable remainder trust (CRT), the assets are irrevocably transferred to the trust. The trust makes distributions to one or more non-charitable beneficiaries, usually including the donor, for life and/or a term of years (not to exceed 20 years), after which the remainder passes to charity. The donor receives a charitable deduction at the time of the gift to the CRT, which is the present value of the remainder interest expected to pass to charity. The remainder interest is calculated based on the life expectancy of the beneficiaries, the term of years, or a combination of the two. For CRTs funded after July 28, 1997, the remainder value must be at least 10% of the initial gift value.

A CRT is irrevocable, however, the trust can be terminated early, with the remainder passing then to charity if all the parties (trustee, beneficiary, and charity) agree.