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The Married Person Generation Skipping Tax (GST) RLT provides the benefits of a Married Person QTIP Trust and additional features.
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It is a Sole-Grantor trust designed for a married individual wishing to make distributions of principal to “skip” persons.
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A transfer to a skip person means that no transfer tax was levied on the death of the first generation person; therefore, an additional (GST) tax is levied on such transfers.
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A generation who should have paid transfer tax was “skipped” by the original transferor so an additional tax (GST) to the transferors estate will be levied.
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The generation skipping tax is an additional tax (additional to estate tax). on assets transferred to skip persons.
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The grantor/transferor is allowed a $1,000,000 exclusion from GST taxes – as indexed.
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A GST Trust is for the grantor who wishes to provide a means of support to his spouse and/or children but wants the outright distributions to ultimately go to his grandchildren (or even great-grandchildren and beyond).
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All the principal that would go to the skip persons may be used for the lifetime benefit of the grantor’s children and/or spouse.
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