Estate planning and tax exemptions?

Question

Say that I create a trust of $1,000,000 exempt from the Generation-Skipping Transfer Tax for my grandchildren. In the situation where I die and all my lineal descendents die before the trust terminates, my will states that the trust goes to my sister and her descendents. If that happens, is the trust still exempt from the GST tax? If not, what are the tax ramefications?

Answer 1

Are you seriously going to take advice for this from here?

Answer 2

Well if you create a trust for your grandkids, it's theirs. The assets of the trust are no longer yours.  So if you die, nothing occurs. If they die then it goes to whatever their will states if not to their descendants or parents, the siblings I think. Not positive of the pecking order.

If you are talking about a life insurance trust in which you are gifting over the premiums every year to say your grandchild, I believe the assets go back to what the trust states. and if it is a life insurance trust they wont get anything cause it would only kick in once you get die.

But ask your attorney writing up the trust.