Congress continues to debate the fate of estate taxes. It’s anybody’s guess as to whether or not lawmakers will iron out a compromise. But it appears that a flat-out repeal of federal estate taxes, once-and-for-all, isn’t in the cards … at least not this year.
That means planning to avoid or reduce estate taxes should remain a prime concern.
If you hope to pass some of your wealth directly to your grandchildren, you face the generation-skipping transfer (GST) tax. This little-publicized tax trap can snare unsuspecting victims to the tune of hundreds of thousands of dollars or more.
How the GST works
Back in the good old days, you could beat the system by passing your money directly to one or more grandchildren. That eliminated one round of estate taxes. So, the IRS dreamed up the GST tax to eliminate that strategy.
When the GST tax kicks in, it becomes a serious matter. The rate is linked to the top tax rate on federal estat...(register to read more)