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Generation-Skipping Transfer or Trust
(redirected from Dynasty Trusts)

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Generation-skipping transfer or trust
A trust in which a principal amount is placed in a trust on the death of person A and is transferred to A's grandchildren when A's children die. The income from the trust goes to the children of person A while they survive.

Generation-Skipping Transfer or Trust
A trust into which assets are deposited and invested, but for different beneficiaries. That is, the assets of the trust are held on behalf of the grantor's grandchildren; they are divided among them when the grantor's children all die. On the other hand, income from the investment of those assets is distributed among the grantor's children. Generation-skipping trusts allow the grantor's assets to bypass estate taxes that the children would have to pay if the assets were directly transferred.


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ABSTRACT Select financial institutions and members of the Bar have seized upon the presence of the limited exemption from the generation-skipping transfer tax provided under the Internal Revenue Code to promote so-called dynasty trusts as a means whereby individuals can build dynastic wealth for a family forever free from transfer taxes.
The answer for many in the business community is a definite "yes," since: * Business owners wanting to sell their businesses and preserve the proceeds for future generations can preserve their wealth in perpetuity by establishing their own dynasty trusts here in New Hampshire rather than being forced to a foreign jurisdiction.
Dynasty trusts can provide incentives to encourage (or discourage) descendants to behave in certain ways.
 
 
 
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