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 ?
While all the branches [of Mellon conglomerate] operate independently, they've almost universally employed smart tricks that minimize taxes, including generation-skipping trusts and making charitable contributions in stock.
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.
In addition to establishing generation-skipping trusts, spouses can take full advantage of the Tax Act by coupling the new exclusion with gift splitting.
While life insurance trusts are popular, I don't know that uncertainty or inability to allocate generation-skipping trusts would prevent a sale.
2] Other trust types include: generation-skipping trusts, marital trusts, personal residence trusts, charitable remainder unitrusts, grantor retained annuity trusts, and 529 educational trusts.
This chapter discusses the generation-skipping transfer tax and planning with generation-skipping transfers, including the use of generation-skipping 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.
Currently, no-tax or low--gift tax techniques are popular, including grantor retained annuity trusts (GRAT), charitable lead annuity trusts (CLAT), special needs trusts, and generation-skipping trusts (GST).
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.