Even if you are one of the many Florida residents who already has a pretty firm estate plan in place, you may find now a good time to review that plan. As life changes, so too might your estate plan. One of the tools you might want to consider is a generation-skipping trust.
As The Motley Fool explains, a generation-skipping trust may commonly be used by people with high-asset value estates. As its name implies, a GST helps you leave assets for grandchildren or subsequent generations. There are sometimes unique situations when grandchildren may not be considered a skipped generation such as if their parents have already died and the grandchildren would then be considered the first in line as heirs.
One of the biggest benefits of a generation-skipping trust is the ability to avoid estate taxes on your assets. Even with this trust in place, you may continue to gift money to your heirs on an annual basis sans taxation. This type of trust may be attractive to you if you know that your adult child is a spendthrift and you fear that by leaving money to him or her your grandchildren will end up with nothing in the end. It can also be beneficial if your child is married to someone you do not want to have access to your estate.
This information is not intended to provide legal advice but is instead meant to help Florida residents understand what a generation-skipping trust is and how it may be a useful estate planning tool for them.