Skipping the generation-skipping transfer tax

Description

Abstract: Under the generation-skipping transfer (GST) tax, an additional tax (on top of estate tax) may be imposed on gifts and bequests that skip a generation. So, it’s not possible for individuals to automatically avoid adverse tax consequences simply by bypassing their children. This article suggests, however, that with proper planning, individuals may be able to sidestep the GST tax — or at least minimize it. A sidebar offers three strategies to minimize GST tax.