(FORTUNE Magazine) – To Maurice Tempelsman, her friend and companion of some 15 years and an executor of her will, she left a Greek alabaster head of a woman. To her children, Caroline and John, she left $250,000 apiece in cash, the Fifth Avenueapartment and other property and personal effects, and money in a trust that she inherited from her first husband. Jacqueline Kennedy Onassis left gifts to many people in her last will and testament dated March 22, 1994, two months before her death on May 19. But in leaving so many details of her estate in a will available to the public in room 504 of the Surrogate Court building in New York City, she left behind as much or more to the rest of us in the form of a model of smart estate planning. In a world where supposedly nothing is inevitable except death and taxes, a good will and a sound estate plan are valuable gifts. Since the days of James Madison, when our forefathers considered outlawing the inheritance of wealth because it went against the American spirit of each person making his own money by working, the government has sought to take a taxing advantage of our passage from this world. Today, Uncle Sam can gobble up as much as 55% of the value of an estate over $600,000, and the states may grab their share too. If you think $600,000 is a high hurdle, consider: The figure has been fixed since 1987 and has not been adjusted for inflation. If you've got a family business or a pension plan, life insurance, a primary residence, and vacation home, you could hit that target more easily than you think. Good thing that Jackie O., with the aid of her attorneys at the New York law firm Milbank Tweed Hadley & McCloy, planned wisely. Though not all of us may have her estimated $200 million in wealth, we can still learn from the expertise that guided her. At a very basic level, the fact that she had a will and devoted 36 pages to the distribution of her estate may be the most important lesson of all. A surprising number of smart people don't make a will, and that opens the door for the government to have a field day while potential heirs hassle with the probate courts or among themselves. On a more sophisticated level, the Onassis will makes smart use of estate- planning vehicles like trusts to pass money on to heirs and charities while reducing the bite from estate taxes. Louis Hamel, chairman of the trusts and estates department at Hale & Dorr, a Boston law firm, plans to use the Onassis will as a case study for partners and associates. "It is an interesting will," says he. "It is a rare look at how a good estate plan is done." In the beginning of the will, Jackie makes specific bequests. Valuable items with a probable sentimental attachment for particular people are duly assigned, such as a copy of John F. Kennedy's inaugural address signed by Robert Frost, to her lawyer, Alexander Forger. Personal friends, maids, and the butler get cash gifts ranging from $250,000 to $25,000. Property goes to those who might want it most. The kids get the New York apartment, for example, but Hammersmith Farm, the Newport, Rhode Island, property she inherited from her mother, Janet Lee Auchincloss, goes to her stepbrother Hugh Auchincloss Jr. These line-by-line bequests reflect one universal estate-planning truth: money is easier to divvy up than property, so spare the heirs from arguing and lay out who gets the goods of value. There is also a clause that recognizes another truth: Uncle Sam taxes everything, so if you want your maid to truly have $50,000, then designate that the taxes on the gift will be paid by your estate, which Jackie did. That saves the beneficiary from having to sell assets to pay the taxes owed. Be careful with such provisions, though, warns Kenneth Brier, an estate- planning attorney with Sherburne Powers & Needham in Boston. If you give one heir valuable property and another the residue of the estate nominally worth as much, and the latter pays all the taxes, he or she may feel shortchanged. If you designate that taxes on gifts be paid from the estate, remember that this will shrink the value of the residual estate. So if you're planning to bequeath the residual estate to someone, adjust that beneficiary's gift accordingly. After all the bequests are made, Jackie leaves the remainder of her estate to the C&J Foundation, a charitable lead trust established in the will and designed to last for 24 years. In a charitable lead trust, a set amount of money is distributed to charities each year and, at the end of its term, the remaining assets are passed on to a named beneficiary. Jackie's will names Caroline, John, Maurice Tempelsman, and Alexander Forger as trustees and directs them to give an annual amount equal to 8% of the initial net fair market value of the assets to charities, preferably those "committed to making a difference in the cultural or social betterment of mankind or the relief of human suffering." Twenty-four years hence, the assets pass to her grandchildren, the oldest of whom, Rose Kennedy Schlossberg, is now 6 years old. Charitable lead trusts are a great way to give money to family members and charities and save on estate taxes, provided your heirs don't need income right away. Assume you put $1 million into a 24-year charitable lead trust, says Hamel of Hale & Dorr. You can set the payout rate to charities as high or as low as you wish, but to maximize the tax benefits on a trust of this size, a 4% rate is about right. If you choose to give the charities $40,000 per year, the present value of that gift, discounted at a current federal rate of 8.4%, is $407,000. Your taxable estate is reduced by this amount to $593,000, or just below the $600,000 exemption, so your taxes are zero. If you gave $1 million to an heir outright, on the other hand, the estate taxes owed would be $153,000. If this gift was for your grandkids, and it was over $1 million, it would suffer yet another blow from the generation-skipping tax, which reduces the sum by 55%.

Although charitable lead trusts have existed for years, they haven't been widely used. But today such a trust makes sense for a lot of folks, including those who want to pass on a family business without being forced to sell it to pay the taxes on the appraised value. The family business will have to generate money to give to charity every year, which may take some discipline, says Hamel. Also, the trust can't give away more than 60% of the initial value of the business, otherwise the Internal Revenue Service will force the trust to liquidate. But putting the firm in a trust that will ultimately be paid to a relative is one way to keep it all in the family. One nice thing about writing a will and thinking about your estate: it is a chance to leave a final word in black and white. Jackie's voice comes through when she asks, for example, that her children respect her desire to keep her papers private. Done right, such wishes can mean almost as much as legal safeguards. Says Marshall Gunn, a CPA and estate planner in Jacksonville, Florida: "The will made a real impression. She wasn't just saying, 'here are my assets.' She said why she gave them. She made plain her intent for social good in describing the charities. She passed power on to her children as trustees. You could see the thought beyond the legal verbiage, and that's what a last will and testament should ultimately reflect."

CHART: NOT AVAILABLE CREDIT: FORTUNE TABLE CAPTION: ELEGANT ESTATE PLANNING