This device is the mirror image of a charitable remainder trust. You fund an irrevocable trust that then pays a certain percentage to the Cato Institute for a specified period of time. After that time, the principal is paid to a remainder beneficiary (typically, children, grandchildren, or other family members).
With a charitable lead trust, you can pass an income‐producing and potentially appreciating asset to your heirs while also helping Cato advance civil society. The value of the assets placed in the trust is frozen for gift‐ and estate‐tax purposes on the date of transfer. This means that any future appreciation of the assets is free of gift and estate taxes.