When a person dies, their assets get transferred to their spouse or children. Many people love their grandchildren, and it is quite common for them to let their grandchildren inherit some of their assets. This way, you are giving them a strong foundation for their future. It is also an excellent choice to leave some money for their well-being. When the assets go directly to your grandkids, you mostly only have to pay estate tax once. If the assets were to go through the whole family, the family might end up paying two to three times for the same property. Therefore, making a generation-skipping trust is the best method to save tax on your estate. If you are looking to create a generation-skipping trust, then hire a probate attorney near me 11566.
Ask Probate Attorney Near Me 11566 What Is A Generation-Skipping Trust
A generation-skipping trust is a legal document that allows the transfer of properties directly to your grandchildren. Usually, it would have gone to your kids, but with this trust, it skips the next generation, i.e., your children. The parents of the child will not have any ownership of the asset.
When creating a generation-skipping trust, it is not necessary to name only blood-related beneficiaries. Anyone can be named as the beneficiaries, as long as they are 37.5 years younger than you. You cannot name your spouse or ex-spouse as the beneficiary, even if they are 37.5 years younger than you. You can even name your friends’ child or your nephew or niece as the generation-skipping trust beneficiaries. Hire a probate attorney near me 11566 to understand who you can name as the beneficiaries of your generation-skipping trust.
Ask Probate Attorney Near Me 11566 How To Avoid Taxes Using Generation-Skipping Trust
In the normal process, when your estate enters the probate court, you need to pay various taxes that apply to your estate, and then these assets then get transferred to your kids. When your kid’s estate enters the probate court, their estate is again exposed to tax. In general, your family will pay the tax twice on a single asset to transfer assets from grandparents to grandchildren.
When you use a generation-skipping trust, you end up paying tax only once. You entirely skip one whole round of probate process. This way, your family can save a lot of money if they can avoid paying a hefty sum as tax. The beneficiaries will be the sole owners of the assets. This is the main reason why people prefer using generation-skipping trust over a living trust.
Ask Probate Attorney Near Me 11566 If You Should Create A Generation-Skipping Trust
If you have a small estate with a value of less than $11.58 million, you should not worry about taxes. Since your estate is small, you can directly let your children inherit all your assets. It will be pointless to create a generation-skipping trust.
The taxation issue arises when the value of your estate is more than $11.58 million. It will incur a lot of tax if it goes into a probate court. Therefore, in such situations, it would be best to create a generation-skipping trust.
Using a generation-skipping trust, you will end up decreasing your estate’s value. By decreasing the estate’s value, you will be able to avoid paying a massive amount as the federal estate tax. At the same time, your family will also be able to save a lot in inheritance tax. Therefore, creating a generation-skipping trust can be very useful for you as well as your family. If you need any help creating a generation-skipping trust, feel free to consult with a probate attorney near me 11566.
How To Create A Generation-Skipping Trust
If you are thinking of making a generation-skipping trust, we recommend hiring a probate attorney near me 11566. You can also try and make it online, but it will just not cover everything. Creating a generation-skipping trust is quite tricky and complicated, and you will need help from an experienced attorney. The attorney will have the expertise to correctly identify which assets are worth putting into the generation-skipping trust.
Conclusion
A generation-skipping trust can be an essential tool to use when planning your estate, especially if the value of your estate is significant. A generation-skipping trust can save you and your family a lot of money and time. They will also not have to go through the hassle of probate court. So, now it is time for you to create a generation-skipping trust and enjoy your life to the fullest.
