Legal Question in Tax Law in Texas

Re: Generation Skipping Trust Question

I'm going to assume that by "GST" you mean a trust. I wish I could give you a more definite answer, but the generatioin skipping transfer tax is one of the most complex areas of tax law. It's impossible to give any sort of exact answer to the question of estate and generation skipping transfer tax liability, since so much depends on such issues as how the trust is structured, whether the decedent was married at the time of death, what sort of assets are in the estate (for example, if a portion of the $2 million is in a closely held corporation, you'll have different result than if the $2 million is in cash and publicly traded securities). Generally speaking, with some advance planning, there is no reason a person with a gross estate of $2 million should pay any tax at all in 2004. In the event there IS a generation skippping transfer tax liaiblity, it is imposed on the assets transferred, unless the trust instrument specifically directs otherwise. A deduction is allowed for expenses incurred in connection with paying the tax (for example, fees paid to a CPA or lawyer). The property is generally valued at the time of the generation skipping transfer, the timing of which depends on how the trust is structured.

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