What is a generation-skipping trust?

A generation-skipping trust (GST) is a type of trust in Colorado that allows someone to pass their wealth and assets to a beneficiary who is two or more generations down the line. For example, a grandparent may decide to pass their wealth directly to their grandchildren, rather than having it pass through their children, the parents of the grandchildren. This type of trust can be used to minimize taxes, particularly on large estates. GSTs can be used in a variety of ways in Colorado. For example, the donor can set certain conditions that must be met in order for the trust to be used, such as the beneficiary being of a certain age or having a certain level of education. The trust could also be set up to provide care and support to the beneficiaries, such as medical or educational expenses. GSTs can also help protect the assets in the trust from creditors. If the assets in the trust are not owned by the beneficiary himself, the beneficiary cannot be forced to use the assets to pay their creditors. This can be particularly useful if the beneficiary is going through bankruptcy or other financial difficulties. Generation-skipping trusts can be complex and must be set up properly in order to provide the intended benefits. Therefore, it is important to seek the advice of an experienced attorney who can help ensure the trust is drafted properly to meet the goals of the donor.

Related FAQs

What is estate tax?
What are the advantages of an irrevocable trust?
How do I wind up an estate?
What is a spendthrift trust?
What is a trust distribution?
How can I create a trust?
What is a testamentary trust?
What is an irrevocable trust?
Who can be a trustee of a trust?
What are the types of trusts?

What is a generation-skipping trust?

Related FAQs

Related Blog Posts