How does a charitable remainder trust work?

In a charitable remainder trust assets are first distributed to at least one non-charitable beneficiary for a specified period with the remainder assets being distributed to at least one charitable beneficiary at the end of the designated time. For example, imagine that you established a charitable remainder trust and transferred $5 million into the trust.  The trust terms might provide for distributions of $50,000 to each of your four children for ten years. After ten years, the assets remaining in the trust would be distributed to your named charitable beneficiary (or beneficiaries). Keep in mind that the trust should be earning interest during the ten-year period of initial distributions as well which means your remainder beneficiary will receive more than the remaining $3 million from the initial gift.