Gyrations of Generation Skipping

Generation-skipping trusts, also known as dynasty trusts, are designed primarily to avoid estate taxes each time one generation transfers wealth to the next generation.

For a number of reasons, the government seems to think that family wealth ought to pass from one generation to the next, without “skipping” over anyone. However, that’s not always the way the world works (or the way folks want to distribute their assets)

What if you want to provide for your grandkids instead of your children?

This is one time when extra planning is crucial to escape a series of tax law traps. As a result, this planning may require a generation-skipping or “dynasty” trust.

The idea that wealth ought to trickle down from generation to generation is, if nothing else, a way of guaranteeing that taxes are paid at each level. On the other hand, it’s not necessarily in keeping with your plans or modern reality. For example, who would have anticipated the student debt so many grandchildren face today?

For whatever reason, you might want to skip a generation in your estate distribution. The estate planning vehicle to accomplish this objective is a trust, specifically a “generation-skipping” or “dynasty” trust.

For more information, check out an article in ProducersWeb titled Generation-skipping Trusts.

While there are many limitations, and perhaps also a growing political battle to further limit such trusts, there are very real gains to be secured for you and your family.

These trusts can become complicated very quickly, so competent counsel will be necessary to determine whether a generation-skipping trust is appropriate for your unique circumstances and, if so, then to implement it.

You can learn more about  estate tax planning  on our website. Be sure to sign up for our complimentary e-newsletter to stay abreast of issues like these that could affect you, your loved ones and your estate planning. 

Reference: ProducersWeb (April 11, 2012) “Generation-skipping Trusts

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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.