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

A generation skipping trust is a type of estate planning law that is used in West Virginia to pass assets to specifically-defined beneficiaries. This trust is designed to “skip” one or more generations of descendants so that the wealth is passed directly to grandchildren or more distant relatives. In other words, the trust allows the settlor (the person creating the trust) to bypass their children or grandchildren and transfer the assets to a more distant generation. A generation skipping trust works by specifying who the beneficiaries are and what assets are to be passed on. The assets held in the trust can be anything from financial securities to real estate. The trust is structured so that the settlor can specify which beneficiaries will receive the assets, as well as when and how much they will receive. The settlor can also decide how the trust will be managed, such as appointing a trustee to manage the assets and to make sure that the terms of the trust are followed. Another key aspect of a generation skipping trust is its tax advantages. Since the beneficiaries are more distant relatives, the taxes that would be imposed on the transfer of the assets are reduced. This is because the IRS taxes transfers to more distant relatives at a lower rate than to immediate family members. In West Virginia, a generation skipping trust is a useful tool for estate planning. It allows for assets to be passed on to more distant generations and helps to reduce the taxes imposed on the transfer of the assets. It also gives the settlor control over how the trust is managed and who will receive the assets.

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

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