Estate planning often focuses on transferring assets to children, but for families seeking long-term wealth preservation, a generation-skipping trust (GST) offers significant benefits. A GST allows assets to bypass the immediate next generation and instead pass directly to grandchildren or later heirs, reducing estate tax liabilities while maintaining financial security.
What Is a Generation-Skipping Trust?
A GST is a type of irrevocable trust designed to pass assets to individuals at least two generations below the grantor—such as grandchildren or even great-grandchildren. This strategy avoids double taxation, which would occur if assets were passed to children first and later to grandchildren.
Key Advantages of a Generation-Skipping Trust
1. Reduces Estate Taxes
Assets placed in a GST avoid estate taxes at the children’s level, ensuring wealth is preserved for future generations without unnecessary tax burdens.
2. Preserves Wealth for Future Generations
By skipping a generation, this trust protects assets from potential financial mismanagement by the immediate heirs and secures long-term financial stability for grandchildren or other beneficiaries.
3. Provides Asset Protection
A GST shields assets from creditors, lawsuits, or divorce settlements, ensuring that wealth remains intact for designated heirs.
4. Allows for Long-Term Growth
Because assets remain in the trust, they can continue growing through investments, providing a stable financial foundation for future generations.
5. Offers Control Over Distribution
A GST enables the grantor to set specific terms for fund distribution, ensuring heirs receive assets responsibly—whether through milestone-based payouts or controlled trustee management.
6. Supports Philanthropic Goals
Individuals can structure a GST to fund charitable donations or educational trusts, creating a legacy beyond personal family wealth.
Who Should Consider a Generation-Skipping Trust?
A GST is ideal for individuals with:
- Large estates subject to federal estate taxes
- Long-term wealth preservation goals
- Concerns about financial responsibility in the immediate next generation
- A desire to support future generations or charitable causes
Ensure Smart Estate Planning with a Generation-Skipping Trust
For high-net-worth individuals and families looking to optimize their estate plans, a GST provides tax advantages, wealth protection, and financial security for future generations. Expert estate planning ensures proper structuring and compliance with IRS regulations.
For personalized estate planning assistance, contact The Eastman Law Firm:
Contact Us Today
Name: The Eastman Law Firm
Address: 4901 W. 136th Street, Ste. 240Leawood, Kansas66224
Phone Number: (913) 908-9113
Website: www.theeastmanlawfirm.com
