Question

Estate Finance Family Tax Plan Question

Father creates a trust that provides income to Son for Son's life. Upon Father's death, the remainder of the trust will continue in trust for Son until he reaches age 35, at which point the remainder will be distributed to him. If Son is age 35 or older at father's death, then the remainder of the trust is distributed to him outright. If Son dies at any point during the administration of the trust, then the trust terminates and the remainder is distributed to Grandson.

Based on the information above, please answer the following questions:

• In 2019, Son is 30. Do you think this trust is a GST trust for transfers made by Father to the trust in 2019? Why or why not?
• In 2029, Son is 40. Do you think this trust is a GST trust for transfers made by Father to the trust in 2029? Why or why not?

Answer 1

page; 01 Answer Based on the information on the problem (1) In 2019 , if the son is the age of 30 years, then the trust will not be a GST Trust (generation skip Tsuist) as the amount in trust if father dies, will goes to the son itself but not to the grandson, it is not - skipping the generation. (a) gn 2019, if the son is the age of 39 years, then the trust will be a Gst Trust as the amount in touist of father dies, will goes to the grandson but not the son, it is Skipping the next generation,