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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
May/June 2025
A Generation-Skipping Trust May Be a Smart Move
This unique trust allows you to transfer assets to beneficiaries two or more generations younger than you — your grandchild or great-grandchild, for instance (or anyone else at least 37.5 years younger than you) — in a tax-advantaged way.
How It Works
Say you use a generation-skipping trust (GST) to transfer assets directly to a grandchild rather than giving them to your child. You avoid estate tax being imposed twice on those assets—once when passing to your child and again when they pass to the grandchild. Giving assets directly to a great-grandchild avoids an additional round of estate tax.You can also use a GST as an incentive for behaviors you'd like to encourage or discourage in the younger generation. For example, you might stipulate that your beneficiary receives distributions only if they maintain a certain college GPA, successfully complete a rehab program, are self-supporting, or if the funds are used for specific purposes, such as purchasing a home or starting a business.
A GST will impact three generations and may remain in effect for a long time. Because your trustee will hold significant power, you should carefully consider your choice. Selecting a family member could breed resentment among other family members and create issues. Additionally, you should appoint successor trustees as well.
Not Tax Free
Assets passing through a GST may be subject to the generation-skipping transfer tax. This tax rate is the same as the estatetax rate. However, the generation-skipping transfer tax generally only applies to estates greater than $13.99 million in 2025.An important note: Unless new legislation is passed this year, this exemption amount is set to fall to $5 million in 2026. So, if you think a GST might fit your planning, now may be the time to talk with your trusted legal and financial professional to learn more details.
GE-7657055.1(2/25)(Exp.2/29)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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