What is a generation skipping trust and how does it work?

A generation skipping trust is a legal trust set up to provide protection for assets across multiple generations. This type of trust is mainly used to avoid the estate tax on larger inheritances. In Nebraska, the generation skipping trust is designed to ensure that assets pass directly to grandchildren, or any beneficiary two or more generations below the original grantor. The trust is set up to provide payments or distributions to beneficiaries over a certain period of time. The generation skipping trust works to ensure that the assets pass directly to the grandchildren while avoiding the estate tax. This is done by having the grantor of the trust name the grandchildren as beneficiaries and appoint a trustee to manage the assets. The assets are then held in the trust until it is time to make a payment or transfer to the beneficiary. The trust must also contain language that allows for distributions to the beneficiaries across multiple generations. The generation skipping trust is an important tool for those in Nebraska who want to ensure that their assets will be distributed to their grandchildren in a tax-efficient manner. With careful planning, the trust can help ensure that the assets can be managed and transferred appropriately, while also helping to protect the assets from being taxed.

Related FAQs

What is a testamentary trust and how does it work?
How do I plan for a child or grandchild with special needs?
What is a health care directive and how does it work?
What should I do if I want to disinherit a beneficiary?
How should I distribute my assets if I don't have a will?
What is a testamentary trust?
Who should be included in an estate plan?
What are the different types of estate planning documents?
What is an estate distribution plan and how does it work?
What is a pet trust and how does it work?

What is a generation skipping trust and how does it work?

Related FAQs

Related Blog Posts