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

A generation skipping trust (GST) is a type of trust that is used for estate planning in Washington. It allows for resources to be transferred from an estate to more than one generation without being taxed each time. The trust is set up to provide financial resources for family members that are more than one generation removed from the original owner of the estate. The trust is created by the original owner of the estate and is designed to cover multiple generations. The terms of the trust are set out by the creator and detail the beneficiaries, the trustees, and the purpose of the trust. The trust also states how and when distributions are made to the beneficiaries. Once the trust is set up, the estate assets are transferred into it. This keeps the assets safe and away from creditors or other potential claims. The trust transcends generations, meaning that your heirs will continue to benefit from the trust, even if you are no longer alive. The trust also protects the estate assets from taxation, because the trust is not taxed until the trust is distributed to the beneficiaries. This allows for more resources for your family as the trust is not depleted by tax payments. Generation skipping trusts are a useful estate planning tool that can protect your assets and provide financial security for future generations. By setting up a generation skipping trust, you can ensure that your assets are passed down from generation to generation without being taxed.

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

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