How will the GST tax affect your estate plan?

Description

Abstract: A new grandparent often considers making a gift to the newest member of the family. However, before taking action, it’s important to understand how the generation-skipping transfer (GST) tax may affect an estate plan. The GST tax is a flat tax on transfers that skip a generation. This article offers the definition of a “skip” person and particular situations in which the GST tax applies. It also discusses allocating the GST tax exemption in a way that maximizes the tax savings.