A Generation‑Skipping Trust (GST) is an irrevocable trust designed to transfer wealth directly to grandchildren or other beneficiaries at least 37.5 years younger than the grantor, thereby skipping the children’s generation for estate‑tax purposes. This can dramatically reduce cumulative estate taxes and preserve family wealth over multiple generations.
A flat 40% federal tax applies to transfers to skip persons above the exemption amount ($15M now).
If you allocate GST exemption properly, the trust can grow free of estate tax for multiple generations.
Your estate must be very large for this to make sense.
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