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Generation-Skipping Transfer Tax: Fundamentals and Planning Opportunities

Identifying Skip Persons, Direct vs. Indirect Skips, Exemption Allocations, and More

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, November 22, 2023

Recorded event now available

or call 1-800-926-7926

In this course, our panel of estate experts will describe the fundamentals of the complex federal generation-skipping transfer (GST) tax in simple and clear terms. They will also talk about GST planning opportunities, particularly those that should be implemented prior to the reduction in the GST tax exemption.

Description

A significant challenge for estate advisers and compliance professionals is navigating the GST tax, which has the reputation of being one of the most complicated tax rules. However, the basic mechanics of the GST tax regime lie in identifying situations in which inter-generational transfers circumvent estate or gift tax liability.

Tax advisers serving high net worth individuals, as well as fiduciary compliance professionals, need to understand the fundamentals of the GST tax to avoid unnecessary tax costs.

A GST occurs when a person gifts or bequeaths property to a person who is two or more generations younger (37.5 years) than the person transferring assets. The recipient of a GST is a "skip person." The GST tax aims to prevent taxpayers from avoiding estate or gift taxes by imposing a flat tax on any gifts to skip persons more than the GST estate tax exemption amount.

There are two types of GSTs--direct skips and indirect skips. Tax advisers must be able to identify both kinds of transfers subject to the tax to calculate exemption amounts and accurately report GST on Form 709.

Listen as our experienced panel provides practical guidance on allocating GST exemptions and on the elections available to tax advisers and compliance professionals to minimize the impact of GST tax.

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Outline

  1. Overview of how GST tax fits into the wealth transfer tax regime
  2. Defining the rules governing when a GST takes place
    1. Identifying skip persons
    2. Direct skip transactions
    3. Indirect skip transactions
  3. GST exemption and allocation rules
  4. Intro to Form 709
  5. Illustration of a basic skip transaction and how to report

Benefits

The panel will discuss these and other important issues:

  • Identifying "skip persons" and gifts that qualify as GSTs
  • Keeping track of exemption amounts accumulated over multiple years
  • Direct skips vs. indirect skips
  • Guide to Form 709 for gifts that must be reported but do not incur GST tax
  • Calculating GST tax on taxable gifts

Faculty

Clear, Michael
Michael T. Clear
Partner
Wiggin and Dana

Mr. Clear focuses his practice on estate planning, estate and trust administration, probate litigation, and...  |  Read More

Daniels, Daniel
Daniel L. Daniels
Partner
Wiggin and Dana

Mr. Daniels focuses his practice representing business owners, private equity and hedge fund founders, family...  |  Read More

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