A charitable remainder annuity trust (CRAT) is likened to a fixed annuity-here you retain an income based on a percentage of the fair market value of property initially deposited in the trust. Here the payout can be made over your life, the lives of additional beneficiaries, or a specific term of years. At the end of the term, the remaining assets in the trust pass to your charitable beneficiaries. You get an income tax charitable deduction in the year of its creation, based on a formula that estimates the future value of the remainder that will eventually go to the charitable beneficiaries.
A charitable remainder unitrust (CRUT) is akin to a variable annuity. You make an irrevocable transfer of assets into the trust and the trust pays you a percentage of the value of the trust assets recalculated each year. Therefore, the amount you receive can fluctuate based on the value of the trust assets. At the end of the term, the remaining assets will pass to the charitable organization, and you again receive an income tax charitable deduction in the year the trust is created equal to the estimated value of the assets that will pass to the charity.
A charitable lead annuity trust (CLAT) is a bit different. In this type of trust, the charity receives income for a certain term or for your life. At the end of that term, or at the end of your life, the assets in the trust then pass on to your non-charitable beneficiaries. As the donor, you receive an income tax deduction in the year that you create the CLAT for the amount that is estimated as going to the charity over the annuity term, but during the term of the CLAT, you pay income tax on the amount of income going to the charity even though the charity (not you) is receiving it.
All these abbreviations can get confusing quite quickly. Speak to an experienced estate planning attorney and find out what works in your specific situation.