Want to help pay for a grandchild’s education while moving significant assets out of your estate? The normal vehicle of choice would be a 529 college savings plan, which lets you and your spouse make an immediate tax-free gift of $130,000 to an account in any student’s name. But there’s another option—a health and education exclusion trust, or HEET—that might work even better, particularly if you also have philanthropic goals.

With adequate funding, a HEET could cover the education and medical expenses of several generations of beneficiaries, while also providing annual support to a favorite charity. This trust has several unique features:

Trust income can be used for just three purposes—to pay tuition for any kind of education, from preschool to graduate school; to fund medical insurance premiums and health-related travel expenses; and to make donations to charitable organizations. Because of those restrictions, assets contributed to a HEET won’t trigger the generation-skipping transfer (GST) tax, which would apply if assets could go directly to a grandchild. Nor do contributions to a HEET count against your lifetime GST exemption. Because the IRS considers a charitable beneficiary to have a perpetual life, a HEET—which must include such a beneficiary—can avoid what’s known as a taxable termination. That means the life of the trust can be extended indefinitely.

Taken together, these attributes can make a HEET part of an effective estate planning strategy. Suppose, for example, you have two grandchildren approaching college age. You and your spouse could each utilize your lifetime gift tax exemption to make $1 million in tax-free gifts to a HEET. The trust, with $2 million in assets, might generate annual income of, say, 5%, or $100,000. You need to earmark about 20% of that income to fulfill the trust’s philanthropic requirement. That leaves $80,000 a year to cover the grandkids’ tuition—for college, a private high school, or any other educational endeavor. And after underwriting their education, subsequent distributions could pay their health insurance costs or the tuition and medical expenses of other grandchildren and great-grandchildren, and on and on indefinitely.

Though there’s no strict rule about how much of the trust’s income must go to charity, most attorneys suggest 10% to 20%. Yet you can’t simply designate a fixed percentage of annual income for philanthropic purposes. Then, the IRS might treat the trust as if it were two entities—one for the benefit of your heirs, and the other for charity. To avoid that, you could give a trustee the power to set each year’s charitable distribution.

Another issue is that a HEET can’t pay non-tuition expenses. To cover room and board, books, and other college expenses, you may need a 529 plan, too. Indeed, unless you’re prepared to fund the trust with at least $1 million, a 529 may be a better option.