Passing More Wealth To Grandchildren

Want to pass more wealth to grandchildren? 

An idea to consider while exemption amounts are high for estate tax and Generation Skipping Transfer (GST) tax is to protect old trusts from the application of the GST tax that can take a big portion of a trust’s assets before they pass to a skip person, like a grandchild.  A common example of such a trust is an Irrevocable Life Insurance Trust (ILIT) that was set up when exemption amounts were lower.  Since the exemption amounts were not as generous, the advisors may not have recommended using “precious” exemption amounts to protect the trust from GST taxes, especially since there are cases where the tax won’t apply.  Here’s the key point:  You are allowed to make late GST tax allocations to protect such a trust and now could be a great time to do so.

If you do not have a trust in place and are considering whether now might be time to take the steps to protect your assets and loved ones read our previous post.

*Intended as general guidance only and not as legal advice.