A charitable remainder trust is a trust that establishes an agreement between a charitable organization and the maker of a trust, an agreement in which the the trustmaker consents to give his estate to the charity in exchange for several advantages. Assets are placed into the trust, set to be distributed among two beneficiaries, who can be the person's family, for example, and then the chosen charity. The distribution of assets is based on principle versus income - the trustmaker's beneficiaries receive the income from the assets during his/her life time and the charity owns the principle when he/she dies. As a result, investments can be made from the assets and those profits can become income to the beneficiary, but capital gains taxes will not need to be paid since the asset is technically in the charity's ownership. A final but very important thing to note concerning charitable remainder trusts, however, is the fact that they are irrevocable - meaning that, regardless of circumstances, they cannot be canceled; the agreement says intact until the end. So while a charitable remainder trust is extremely beneficial, no person should enter into it unadvised or unprepared of its conditions.