Charitable trusts come in two flavors, each offering different benefits.

Before you opt for a charitable trust, it’s important to understand the two main types.

Charitable Remainder Trust

A Charitable Remainder Trust is an irrevocable trust that disperses income to the noncharitable beneficiaries (annual annuity must be at least 5 percent but no more than 50 percent of the trust’s assets) with the remainder of the donated assets going to a specified charity at the time of your death. CRTs generally yield more substantial income tax deductions than do charitable lead trusts.

Charitable Lead Trusts

Often referred to as a charitable remainder trust in reverse, a Charitable Lead Trust disperses income to a named charity, while the noncharitable beneficiaries receive the remainder of the donated assets upon your death. CLTs generally benefit more from gift and estate tax benefits than do CRTs.

A financial advisor can help you determine which of these two charitable trusts accommodate your personal and financial goals.