Understanding Estate Taxes
25. Charitable lead trust
A charitable lead trust, included by Jacqueline Kennedy Onassis in her estate planning, is just about the opposite of a charitable remainder trust.
You transfer an appreciated asset to the trust. This removes it from your estate so you save estate taxes. But instead of paying the income to you, the trust pays the income to a charity for a certain number of years or until you die. Then, when the trust ends, your spouse, children, grandchildren or other beneficiaries receive the assets in the trust.
You don't have to wait until you die to establish the trust, as Mrs. Onassis did. If you set up the trust now, you remove future appreciation from your estate and you can see the charity benefit from your gift.