A Charitable Remainder Annuity Trust (CRAT) provides the donor with a payment based on a percentage of the initial value of the trust. The trust pays the beneficiary or beneficiaries a fixed, guaranteed amount and that payout never changes over time. Since the annuity payment does not change during the term of the trust, a CRAT provides the certainty of a fixed payment amount each year regardless of fluctuations in the value of trust assets.

CRAT donors receive an income tax deduction, based on the present value of the CRAT assets at the time of the gift. A CRAT usually pays a fixed annuity (on an annual, quarterly or monthly) for a life, lives or a term of up to 20 years.