There are plenty of options for leaving assets and property to your loved ones in California. Among them is a generation-skipping trust. If you are interested in this option, it’s crucial to understand what it entails and the benefits it offers.
Understanding generation-skipping trusts
A generation-skipping trust allows you to pass on assets and property to someone in your family from a later generation. This is usually associated with a grandparent leaving things to their grandchildren, but as long as the heir is at least 37.5 years younger than you, it qualifies. This might be a child you had late in life or another relative such as a great-niece, great-nephew or a much younger cousin once or twice removed.
Benefits of generation-skipping trusts
Some people can benefit from a generation-skipping trust. It’s appropriate for certain estates but not necessarily others. If you have a larger estate, you and your heirs can take advantage of ensuring that property that’s been in your family for many generations can be passed down through this type of trust.
A generation-skipping trust typically includes assets and property that are not included in your child’s estate. As a result, this can protect your child’s estate and allows them to maintain control trusts in their own estate plan.
Another notable benefit of generation-skipping trusts is that they can skip estate taxes because they don’t go directly to your children. When property and assets go to the next generation, they can avoid going through taxes twice, which would occur if you first pass them down to your children and then after your grandchildren receive them.
Generation-skipping trusts might be a great option if you have a sizable estate. If you have property you want to keep in the family for many generations to come, this is an ideal way to accomplish that.