A charitable lead trust is, in some ways, similar to a charitable remainder trust. But with a charitable lead trust, the charity receives the income and your beneficiaries will eventually receive the principal. And because the beneficiaries must wait a while before they can receive the asset, its value is reduced for gift tax purposes. So you will pay substantially less in gift tax than if you left the asset to them outright. Also, when you transfer the asset to the trust, it is removed from your taxable estate, potentially saving estate taxes.
A charitable lead trust would be appealing if you currently do not need the income, or if you have current charitable commitments you would like to continue in the future, and you want someone other than the charity (perhaps your spouse, children or grandchildren) to eventually have the assets.
Jacqueline Kennedy Onassis included a charitable lead trust provision in her estate plan. The assets in the trust would benefit charities for 24 years, then go to her grandchildren. Unfortunately (for the charity), the trust was optional, and no assets were transferred into it. However, had her beneficiaries utilized this strategy, it would have eliminated her estate tax completely. (This strategy uses a formula to eliminate the estate tax so it works for estates of any size.)