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.