Intelligent Inheritance Planning

GST Exemption

A vastly ignored after-tax exemption is the generation-skipping transfer (GST) exemption. For 2006, the GST is $2 million ($4 million, if married). It gradually increases on an annual basis until 2009, when the GST is $3.5 million ($7 million, if married). You should seek the advice of an attorney to incorporate this powerful exemption into your estate plan.

Generation-Skipping Protections

When establishing an inheritance for children and grandchildren, provisions should be created to protect your distributed wealth from dilution by:

• Divorce risks,
• On an heir's death, risks the spouse may create by electing to take action against your heir's will - and your assets,
• Risk of creditor attack, and
• Further taxation.

A trusts offers an umbrella of protection that puts the control of inherited wealth in the hands of your heirs or your appointed trustee. The right trust can substantially limit or eliminate the wealth dilution risks.

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