Charitable lead trusts, which allow wealthy donors to make annual gifts to charity, are also gaining favor as a way to minimize taxes on money left to heirs, The New York Times writes.

A rise in the individual gift- and estate-tax exemption to $5-million, in effect through next year, and record low interest rates are driving the popularity of the trusts, in which  charities get annuities for a set number of years. After that period, money remaining in the trust as a result of investment income goes to the donor’s heirs, tax-free.

Lower interest rates keep down the “hurdle rate” set by the Internal Revenue Service on such trusts. The lower the hurdle rate, the lower the annual charity payment and the greater the trust’s income if investments beat the rate, thus boosting the amount left after the annuity period.

The trusts fell out of favor in past years because they often had little or nothing left after the charity payments, but given the current factors, wealth managers and some charities are increasingly talking them up. Harvard University’s Web site includes a page on how the trusts help benefit both the institution and the donor’s heirs.