Because there is, in addition to estate tax, a “generation-skipping transfer tax,” gifts to grandchildren or other persons more than one generation removed from the donor require special planning. The law currently provides for an exemption from the generation skipping transfer tax per donor (the amount of the exemption changes annually). For certain estates, careful planning and creation of multi-generational trusts that leverage the exemption amounts can be an important aspect of the overall plan. In addition, such multi-generational trusts can protect family wealth from creditors.1The IRS is great at coming up with ways to get more of your money.
Multi-Generational “Dynasty” Trust
