Consider giving assets to a non-profit which are otherwise income taxable when given to a person. The best example is an IRA; if you name your children as beneficiaries, they will pay income tax on the distributions received. On the other hand, a bequest of an IRA to a non-profit is tax free. This plan works well if you have other tax-free assets, such as cash or real estate, to leave to your heirs. I recently created the estate plan of a gentleman whose assets were split down the middle between a million dollar cash account and a million dollar IRA. He wanted to leave money to his nieces for college on the one hand, and create a scholarship endowment for engineering students on the other. I introduced him to an Arizona State University Foundation representative and he ended up creating an endowment to be funded at this death by this IRA. He died several months later, and the IRA funded this endowment, tax free. This means that money that otherwise would have been taxable to the recipients at possibly the highest income tax rate was paid to the endowment income tax free. What a great legacy he created! His nieces received the cash account, in trust, to pay for their education when they are older. In the meantime, the money is safe and being managed by their parents as trustees.