The Department Of Treasury has recently released a series of proposals in the Treasury Green Book for the fiscal year 2017. One of the proposals would limit the duration of the generation-skipping transfer (GST) tax exemption. “The GST tax was enacted to prevent the avoidance of estate and gift taxes through the use of a trust that gives successive life interests to multiple generations of beneficiaries.” This tax is placed on gifts and bequests that are made to transferees who are two or more generations younger than the transferor. Under the proposal the GST exclusion allocated to a trust would terminate on the 90th anniversary of the creation of the trust. Each individual has a lifetime GST exemption of $5.45 million. This article provides important details about the treasury proposals in the Green Book and how they will impact trusts.
See Bryan Cave, Treasury Green Book Proposal- Limit Duration of GST Exemption, Wealth Management, February 29, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
