What is the primary function of the CRAT or CRUT structures?

The primary function of a Charitable Remainder Annuity Trust (CRAT) or a Charitable Remainder Unitrust (CRUT) is indeed to enable asset management by the grantor while providing income benefits linked to charitable intentions. These trust structures allow the grantor to receive a stream of income from assets placed in the trust for a specified period, which can be their lifetime or a set number of years.

This income can be particularly beneficial for retirees or those seeking to supplement their income while still having the ultimate benefit of supporting a charitable cause, as the remainder of the trust's assets will eventually go to the designated charity after the income period ends. The management aspect comes into play as the grantor retains the ability to specify how the trust’s investments are managed and can potentially influence the asset allocation to align with their financial goals.

The other options, while potentially related to estate planning, do not accurately capture the essence of what CRATs and CRUTs primarily achieve. Immediate tax credits do not necessarily arise directly from these structures, and while they may provide some tax benefits, that is not their main function. Estate preservation could be achieved through different mechanisms, and although charitable deductions are a feature of these trusts, they are