• A generation skip trust (GST) is a legally binding arrangement whereby assets are passed on to the grantor’s grandchildren or anyone 37.5 years younger, bypassing the grantor’s next generation of children.

  • By missing out on the opportunity to receive assets, the children of the grantor avoid paying inheritance taxes that would otherwise be paid.
  • Generation skip trusts are taxable if the amount transferred exceeds a certain annually adjusted threshold ($11.7 million in 2021).