Generation-skipping transfer or trust

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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.
References in periodicals archive ?
14) Many states do not follow the Murphy approach, which may or may not present a significant risk to both self-settled and third party dynasty trusts.
In this case, the decedent created dynasty trusts benefiting her three sons and their respective families.
Generation-skipping trusts (GST) and dynasty trusts are funded utilizing a grantor's GST exemption, with the remainder beneficiaries being individuals 371/2 years or younger than the grantor.
Morrissette's trust funded the policies, which were held in dynasty trusts, with lump sum premiums totaling $29.
Freidman predicts the following proposals from the president are "more viable" options: to close "loopholes," including (1) eliminating the ability of someone who inherits an IRA or 401(k) to "stretch" the payments over his or her lifetime; and (2) curtailing the availability of sophisticated wealth transfer techniques such as grantor retained annuity trusts ("GRATs"), intentionally defective grantor trusts and dynasty trusts.
They attended seminars covering the following topics: Tips Relating to IRS Audits of Family Limited Partnerships; Federal Tax Update; Valuations; Perpetual Dynasty Trusts Tax Planning and Jurisdiction Selection; Trustee Missteps; Washington Tax Issues Associated with Transfers of Property; Washington Probate and Trust Law Update; Intra-Family Transactions: Lessons in Forgiveness of Debt; Tax-Efficient Disposition of Qualified Plans and IRAs; Planning with Gifts in 2012; TEDRA: A Panacea for Curing Trust and Estate Ailments; Tax Compliance for U.
CPAs have an unprecedented opportunity to demonstrate their value in the following ways before the end of 2012, when the Bush-era tax cuts are set to expire, estate and gift tax exemptions are scheduled to shrink back to $1 million, and current proposals could diminish the planning advantages of grantor and dynasty trusts.
Portability would be retained, but valuation discounts and severable taxpayer-friendly planning strategies such as grantor retained annuity trusts (GRATs) and dynasty trusts would face new restrictions that could significantly curtail their value.
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.
Osborne and Schurig, Nenno, Delaware Dynasty Trusts, Total Return Trusts, and Asset Protection Trusts (Thompson West) 800-328 4880.
The purpose of this Article is to familiarize the unacquainted with dynasty trusts and the unique advantages that Alaska has over other dynasty jurisdictions.