What is a generation-skipping trust?

A generation-skipping trust is an estate planning tool that allows people to pass their assets to future generations without taxation. This type of trust is used to ensure that the funds are passed on to the intended heirs without the burden of taxation being placed upon them. Generation-skipping trusts are set up so a trust grantor transfers their assets to the trust. These assets are then divided into different beneficiaries with the trust grantor choosing which generation to skip. For example, they may set it up so the assets are transferred to the grandchildren of the grantor without going through any of their children first. In Kansas, generation-skipping trusts are regulated the same as other trusts with the most recent changes to the Kansas Trust Code being in 2012. All trusts must be validly created and the trust document must be reviewed and approved by the court. The legal requirements for setting up a trust must also be met, such as having a trustee, and creating a trust fund with sufficient assets. The primary benefit of generation-skipping trusts in Kansas is that they avoid taxation at the federal and state level, allowing families to pass their wealth on to future generations without the burden of taxation. It is important that individuals seek legal advice from an estate-planning lawyer to ensure that the trust is constituted properly and all necessary steps are taken to create and maintain a valid trust.

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What is a generation-skipping trust?

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