When creating an estate plan, you have several types of trusts to choose from. Almost everyone can find a trust that best meets their needs, including reducing taxes and protecting assets. A generation-skipping trust is a trust that passes your assets to your grandchildren instead of your children. Since you skip your children, they won’t have to pay the estate tax. People of all income levels can benefit from this wealth-preservation tool.
Not Just for Relatives
You can use a generation-skipping trust to leave your assets to anyone at least 37.5 years younger than you. This trust is not just for grandchildren. The trustees receive the assets tax-free. However, the skipped generation can also benefit from a generation-skipping trust by being named income beneficiaries.
Limits
The estate tax limits change frequently. If the value of cash and assets exceeds the estate and lifetime gift tax exemption, they are taxed. Currently, the estate and lifetime gift exemption is $12.92 million per individual. However, this exemption ends December 31, 2025 unless Congress extends the exemption. Additionally, the 40 percent top tax rate is still effective.
When the current estate and lifetime gift exemption sunsets at the end of 2025, the rate will return to the rates prior to the Tax Cuts and Jobs Act which doubled the exemption.
How our Georgia Estate Planning Attorneys Can Help
When you die, your estate is subject to taxes at the federal level. Creating an estate plan with various trusts can protect your assets from creditors and help avoid some taxes. We work with clients with all levels of wealth to create an estate plan that best benefits your family and other beneficiaries of your estate. Contact us at 678.781.9230 for a consultation to learn how to protect your assets.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.