Paramus, New Jersey Generation Skipping Trusts

A Generation Skipping Trust (“GST”), sometimes referred to as a “Dynasty Trust”) is designed to avoid estate taxes upon the taxpayer’s children’s deaths and beyond. Pursuant to the terms of a typical GST the trust assets are available to the taxpayer’s children, but the trust assets that are not consumed by the children, are passed on in further trust for future generations without being taxed in the children’s estates. Currently, there is a $2 million limit on the amount that each person can leave in a GST Trust.

Generation Skipping Tax planning is usually only used in estates in excess of $5 million or more, but can be appropriate in some smaller estates (e.g. a couple has only one child).

New Jersey repealed “The Rule Against Perpetuities” – which means that Generation Skipping Trusts can carry on for several generations and avoid estate taxes at each generation.

New York still has a law that limits the duration of a non-charitable trust.

Look to Whitlock Canter LLC for legal representation and more information regarding generation skipping trusts or  estate planning and estate administration matters.