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 ?
It may work through a number of channels including the inheritance of wealth and property, and may be aided by durable social institutions such as generation-skipping trusts, residential segregation, and other demographic processes.
This will be followed by a discussion of the cost factors that are likely to reduce the yield for generation-skipping trusts.
2] Other trust types include: generation-skipping trusts, marital trusts, personal residence trusts, charitable remainder unitrusts, grantor retained annuity trusts, and 529 educational trusts.
Before making substantial transfers to grandchildren -- or to grandnieces and grandnephews -- consult with an estate planner about generation-skipping trusts and charitable lead trusts.
In addition, it was concerned that allowing existing trusts to default or "opt" into these new definitions of income would adversely affect their tax status as qualified terminable interest property trusts qualifying for the estate tax deduction, charitable remainder unitrusts, qualified S corporation trusts, grandfathered generation-skipping trusts or intentionally defective grantor trusts.
Trusts come in a variety of types to fit special needs, from living trusts to generation-skipping trusts to offshore trusts.
Generation-skipping trusts generally are used when the grantor's children already have sizable estates or when the grantor wants to preserve the corpus for the grandchildren.
For example, he points out that tax avoidance devices, like generation-skipping trusts, in which income goes to one generation and capital to the next at some far-distant-future time, brings about a situation in which you can't really say at any given moment to whom the money belongs: you can say only that it belongs to "the family.
Mandel has handled some of Northern Trust's largest and most complex trust portfolios, including irrevocable gift trusts, generation-skipping trusts, charitable trusts, revocable trusts and investment management accounts.
will guide attendees through this process as well as provide other valuable information to business owners, such as valuation discounts, asset protection strategies, the benefits of generation-skipping trusts, and charitable planning opportunities.
Family limited partnerships and generation-skipping trusts with spendthrift provisions are often used for this purpose.
In addition, since some beneficiaries of generation-skipping trusts are relatively young or not yet born on the trust's date of creation, complex financial arrangements are usually included in governing documents that allow the fiduciary flexibility in managing these trusts.