\"The GST is triggered by the transfer of property to someone more than one gene

Question

 "The GST is triggered by the transfer of property to someone more than one generation younger than the donor or decedent--a grandchild rather than a child.  A transfer to a grandchild is not subject to GST, however, if the grandchild's parents are dead."  Does that mean the GST doesn't apply?

I don't understand this part either. "The GST is very complex and can be triggered directly by transfers or indirectly by a termination of interest?" If you are the grandchild, you can gift it to someone else so they don't have to pay taxes?

Explanation / Answer

The generation -skipping tax (GST) is a supplemented tax designed to prevent the avoidance of transfer

taxes (both estate and gift tax) through transfers that skip a generation of recipients

EXAMPLES a grandparent could give a life estate in property to a child, with the remainder to a

grandchild . when the child dies and the grandchild inherits the property , no transfer tax is imposed

because nothing remains in the child's estate ( the life estate terminatesat death ) . in this way , the

grandparent pays one transfer tax ( on the initial gift ) to transfer the property down two generation

hence the GST is triggered by the transfer of property to someone more than one generation younger

than the donor or decedent - a grandchild rather than a child. a transfer to a grand is not subject to GST,

however , if the grandchild's parents are dead , the GST is very complex and can be triggered directly

by a termination of an interest. fortunately the GST is not widely applicable because it does not apply

to transfer that qualify for an annual gift tax exclusion and each donor / decedent is entitled to relatively

generous aggregate exemption

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