Beware of the generation-skipping transfer tax

Description

Abstract: Thanks to recent tax law changes, most families can avoid liability for federal estate and gift taxes. However, there’s a lesser-known tax whammy that can hit wealthy individuals without warning: the generation-skipping transfer (GST) tax. As its name implies, the GST tax generally applies to transfers that “skip” a generation. This article details the GST tax. A sidebar explains GST tax strategies.