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 ?
The State of Nevada provides many significant and notable benefits, including what DTC considers superior asset protection, tax advantages, excellent privacy laws 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.
The first part of this two-part article, in the January 2001 issue, discussed five top estate planning techniques: use of lifetime gifts, insurance trusts, dynasty trusts, qualified personal residence trusts and grantor retained annuity trusts (GNATs).
Chapters cover single life policy trusts, survivorship policy trust notes to drafter, outlines and forms and a discussion of the interaction of Crummey withdrawal powers used in dynasty trusts.
Lamm has extensive experience helping multigenerational families transfer their business interests to succeeding generations through the use of more advanced estate planning techniques such as intentionally defective grantor trusts, grantor retained annuity trusts, irrevocable life insurance trusts, and dynasty trusts.
The result is that, besides educating their children, parents need to start thinking about establishing dynasty trusts to take care of future generations.
But for those clients who are familiar with irrevocable life insurance trusts or dynasty trusts, buying LTCI through an irrevocable trust can provide multiple benefits.
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.