A form of trust designed to minimize estate taxes in which the property is transfered from an individul to their grandchildren, skipping over the children (and thus avoiding the transfer taxes that would occure when the property moved from the children to grandchildren). See Generation-Skipping Transfer.
Definition from Nolo’s Plain-English Law Dictionary
A trust designed to save on estate tax. The trust principal is preserved for the trust maker's grandchildren, with his or her children receiving only income from the trust. Because the children (the middle generation) never legally own the property, it isn't subject to estate tax at their death. (See also: generation-skipping transfer tax
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:16 pm