Generation-Skipping Transfer Tax Planning Opportunities: Planning to Last Many Lifetimes

Generation-skipping transfer (GST) tax planning is vital to preserving taxpayer assets from being subject to multiple levels of tax. The GST tax is a flat 40 percent rate on certain nonexempt assets and distributions and is similar, but imposed in addition, to the federal estate tax. The cumulative effect of federal estate, GST, and potentially state estate or inheritance taxes may greatly diminish family resources for successive generations.

During this period of double unified credit through 2025 under the 2017 Tax Cuts and Jobs Act (2017 TCJA), the opportunity to protect larger amounts of taxpayer assets from additional levels of future taxes is significant. Even if the taxpayer has engaged in considerable estate planning, high engagement should be maintained in this advisory area throughout the taxpayer’s lifetime and even post-mortem, as many planning strategies are available after the exemption is exhausted.

For more information see Abigail Marie Everist, Ha T Dao, and John Nuckolls “Generation-Skipping Transfer Tax Planning Opportunities: Planning to Last Many Lifetimes“, ABA Probate and Property Journal Jan/Feb 2025.