Contents
Graphic example of three generations and an example of passing assets to the third generation
Purpose
To show that this arrangement results in a small portion of the grandparent's estate being subjected to estate taxes
Uses
Shows how most of the estate flows to the grandchildren, instead of the children
Sales
Life insurance sale on grandparents can be for a lesser amount.
Transitional Uses
Takes advantage of both the generation skipping exemption and the applicable credits of both grandparents
Appeal
Grandparents with estate problems, and independent children who will ultimately pass any inheritances on to their children -- this technique limits taxes by maximizing and using the available credits.