Generation Skipping Trust
A Generation-Skipping Tax Trust (GSTT) is used to protect assets inherited from you from future estate taxes at your beneficiary’s death, and at the death of future beneficiaries.
The assets are held in trust for the beneficiary you named in your trust. When the beneficiary dies, the assets will not be included in that person’s estate for purposes of computing estate taxes. In addition, the assets can continue to be held in trust for the next generation.
While the effect of having a GSTT is great, it can be made more powerful as part of a Heritage Trust.