Don’t Let Generation-Skipping Transfer Tax Surprise Your Clients

We are witnessing a pivotal moment where multigenerational assets are benefiting beneficiaries within the “skip” generation, triggering the generation-skipping transfer tax. This is much to the surprise of people who believed they had deftly navigated wealth transfer taxes. This relatively new issue necessitates that advisors refamiliarize themselves with what triggers the tax and proactively communicate with clients about liquidity planning for liabilities.

This recent upswing may be attributed in part to the timing of when the statute was enacted and the aging of current non-skip beneficiaries. For many taxpayers, the payment of GSTT is now imminent. Although planning may not ...