What is the Generation-Skipping Transfer Tax (GSTT)?

Board-certified Tax & Estate Planning attorney John Strohmeyer of Strohmeyer Law breaks down the intricacies of the Generation Skipping Transfer (GST) tax. You can't just give away piles of money to the grandkids and skip out on estate tax!

We dive into the history of wealth transfer taxes, explain how the estate and gift taxes paved the way for the GST, and learn how this tax functions as a backup mechanism for the federal estate tax. Whether you're planning your estate, considering gifting assets to your grandchildren, or just curious about wealth transfer taxes, this video is your guide to understanding the GST tax and its implications.

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Strohmeyer Law is a law firm based in Houston, Texas, specializing in tax law, estate planning, and probate law.

Nothing in this video is specific legal advice for you. Watching or commenting on this video doesn't create an attorney-client relationship.

[Starch-Wreck]

I want to learn about generation skipping tax. But I’m just staring at Ecto 1 in the background. Everyone has 3 mortgages these days.

[michaelblazin]

Maybe in a follow up video: you described how the grandfather (settlor) could use part of his remaining estate exemption and apply it as as GST exemption to the Revocable Trust turned irrevocable at the settlor’s death. That option also exists for the settlor’s son to use his remaining GST exemption at his death to add to the exemption already added by the grantor (grandfather) to the trust that terminates on the settlor’s son’s death. Hopefully, the grandfather.’s and father’s exemptions plus the grandson’s exemption are enough to shield the grandson from GST when the trust terminates.

I have read about using the future value of the grandfather’s exemption, not its original value at grandfather’s exemption, when the trust terminates for the grandson. The idea is a 2 MM trust funded with a 2 MM GST exemption that grows to 4 MM over the remaining life of the son is fully exempt from GST at the son’s death and trust termination.

Is that correct? I cannot find any specific documentation on how one calculates the future value other than some general comments about documenting it on the 706 filed at the son’s death. It could get messy if the grandfather’s exemption partially covers the original value of the irrevocable trust, Something like it does exist because it is how the true dynasty trusts stay tax free generation after generation.

[chriscastillo]

Great information, but your audio is not synched to the video and it is very annoying and makes it hard to watch. Like watching a dubbed foreign movie.