Generation-Skipping Transfer Tax (GSTT) is a tax on transfers of assets to persons who are two or more generations below the individual making the gift or bequest. This tax is in addition to any estate taxes that may be due on the property in question. The tax rate is equal to the maximum federal estate-tax rate in effect.

  

Estate taxes are generally due when assets pass from one generation to the next. This method of generation-skipping eliminates some of the assets from being subject to estate taxes at both the grandparents' death and the parents' death.

ABC Trusts for Generation-Skipping (Illustration) | ABC Trusts for Generation-Skipping (Definition) | Trust A (ABC Trusts) | Trust B (ABC Trusts) | Trust C (ABC Trusts)

 

 

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