A generation skipping tax-exempt trust provides income and professional asset management to several generations of beneficiaries, while minimizing or avoiding Generation Skipping Transfer Tax.

Congress imposed the Generation Skipping Transfer Tax in 1986 to discourage wealthy individuals from gifting or bequeathing assets to grandchildren or great-grandchildren to avoid estate tax. The Generation Skipping Transfer Tax is not triggered if gifts fall within the limits of an exclusion that is indexed for inflation.

Characteristics include:

• Help individuals take advantage of gift exemptions and shelter their gifts in a trust that will protect and grow assets for future generations.

• Irrevocable and intended to provide for the orderly distribution of an estate to the grantor's grandchildren or great grandchildren.

• Keep assets out of the taxable estate.

• Allow for distributions to the children of the grantor to an ascertainable standard.

• Professional asset management as well as orderly and immutable distribution of the trust's assets according to the terms of the trust.