Planning For A Secure Future

How can a generation-skipping trust help your family save money? 

On Behalf of | Feb 4, 2025 | Estate Planning

Estate taxes take a big bite out of family wealth each time money passes from one generation to the next. Many families now turn to generation-skipping trusts (GSTs) to keep more assets in the family and reduce their tax burden. This innovative planning tool helps preserve wealth for grandchildren while offering tax benefits that regular trusts can’t match.  

What makes a generation-skipping trust different?  

A generation-skipping trust moves assets directly to grandchildren or great-grandchildren instead of passing them to children first. This trust type skips one round of estate taxes, which means more money stays in the family. You can put many assets into this trust, from cash and stocks to real estate and business shares.  

How your family benefits  

GSTs offer several key advantages for both the current and future generations. The trust can give your children income while saving the main assets for grandchildren. Here’s what you can expect:  

  • Better protection from creditors  
  • Clear rules about who gets what  
  • Income options for children  
  • Full benefits for grandchildren  

Beyond these benefits, you’ll keep more control over how future generations use the money. You can set guidelines for education, healthcare or other specific needs.  

Making it work for your family  

The IRS limits how much you can put in these trusts without extra taxes. These amounts change yearly, and state laws add their own rules. Your trust needs careful planning to work well and stay within legal limits.  

A generation-skipping trust can make a real difference in your family’s financial future, but it needs the proper setup. Talk to an estate planning lawyer who knows these trusts well. They’ll help you create a trust that fits your goals and follows all tax rules. With expert guidance, you can build a lasting legacy that benefits several generations of your family.