Generation-Skipping Trusts: Using Tax Attorney Mohita Kaur’s Experience to Preserve Wealth for Next Generation

From the tech innovators of Silicon Valley to the established estates of San Francisco and Marin County, especially for wealthy families across Northern California – from the increasingly complex world of wealth transfer and estate planning – a great desire to preserve wealth and legacy often runs counter to the reality of estate taxes. Although conventional wills and dynasty trusts handle immediate heirs, they may fail to stop significant tax erosion as money flows from one generation to the next. Enter the Generation-Skipping Trust (GST), a complex estate planning mechanism meant to avoid these generational transfer taxes, therefore guaranteeing a more lasting financial legacy.

But given its complex interaction with gift and estate tax exemption and the maze of IRS rules, the smart establishment and painstaking administration of a GST calls for an attorney with a really unusual mix of legal acumen and great fiscal foresight. You have to go with the best in San Francisco, California for a project this important. Tax attorney Mohita Kaur and the committed KaurTax.com staff reflect that unmatched knowledge.

The pillar of our company’s dedication to quality in wealth transfer and strategic legacy planning is Mohita Kaur, the acclaimed Managing Principal of KaurTax. Her strong knowledge as a seasoned tax attorney and highly esteemed tax advisor stems from almost a decade of almost priceless experience working at the Big 4 Accounting firms. She focused in offering strategic tax counsel to top-tier leading companies while working at these global financial titans, carefully negotiating the most complex tax systems and demanding multinational compliance issues. Her deep, enterprise-level expertise has given her a personal awareness of sophisticated asset management, corporate governance, and—above all—the long-term tax consequences of wealth transfer methods. Mohita Kaur guarantees that every generation-skipping trust is organized not only legally but also with astute tax foresight for all beneficiaries involved, so maximizing both wealth preservation and intergenerational financial efficiency. She brings this high-level strategic insight directly to individuals and families throughout Northern California.

What is a trust with Generation-skipping? Saving Money Over Generations

Designed especially to “skipping” the intervening generation (the grantor’s children), a Generation-Skipping Trust (GST) is an irrevocable trust specifically intended to transfer wealth from a grantor to beneficiaries two or more generations younger than the grantor (e.g., grandchildren or great-grandchild). A GST’s main goal is to prevent the Generation-Skipping Transfer (GST) tax from otherwise applying on direct transfers to these “skip persons.” This calculated action can drastically lower the total tax load on inherited wealth, therefore guaranteeing a greater amount of the estate stays whole for next generations.

These trusts may be formed as part of the testamentary wishes—created by will, effective following death—or during the lifetime of the grantor—intervos. The basic concept is to combine smart estate tax planning with wealth preservation to create a structured legal organization enabling money to pass to selected beneficiaries, therefore maximizing the tax effects for inheritors and the total estate of the donor.

Recognizing the Generation-Skipping Transfer (GST) Tax: An Important Task

Complementing federal estate or gift taxes, the Generation-Skipping Transfer (GST) tax is a separate federal tax levied .

It relates to wealth transfers to “skip persons,” usually speaking:

Those at least 37.5 years younger than the transferor—not a lineal descendent.
Two or more generations younger than the transferor, lineally descended from the transferor (grandkids, great-grandkids).
Trusts whereby every beneficiary is a skipperson.

Right now, the GST tax rate is the highest federal estate tax rate in use. This is 40% for 2025. The capacity of a generation-skipping trust to use the GST tax exemption—which for 2025 is a large sum (subject to periodic inflation adjustments)—allows a sizable part of wealth to pass tax-free to grandchildren and beyond. Mohita Kaur deftly leads clients through the smart distribution of this important exemption.

How does a generation-skipping trust function? Summary

Operating as a structured legal company, a GST offers donors a smart approach to pass assets to next generations and concurrently gains from major tax benefits.

Three main roles are engaged in order to reach this double objective:

Grantor(Donor): The person or company creating and supporting the trust with assets.
Trustee: Designed to oversee the trust, an independent third-party fiduciary—often a professional like a bank or trust company—or a trusted relative. Within the provisions of the trust, the trustee is in charge of asset management, investment selections, and distribution choices.
Beneficiary (“Skip Person”): Usually grandchildren or later generations, the designated people meant to gain from the trust’s assets. The following is a high-level summary of creating a generation-skipping trust:
Establishing an irrevocable trust, the grantor names a trustee to handle and invest the assets. Included as named beneficiaries are one or more qualified “skip persons”. Either as part of a last will and testament (testamentary trust) or while the donor is still living (living trust).
Funding: The grantor funds the trust with assets including cash, publicly traded stocks, real estate—particularly frequent in high-value markets like San Francisco and Palo Alto—private business interests, or other property. Importantly, the grantor assigns their GST exemption to these assets, therefore shielding them from GST tax.

Often spanning many generations, the trustee invests and oversees the assets over the trust term. Often tax-efficiently occurring within the trust itself are earnings and growth.
Trust words guide the “skip person” beneficiaries to whom trust payouts are made. The trust itself was made exempt, hence these payouts are not liable to GST tax.

Tax Benefits Obtained:

Main advantage is avoiding GST tax. Transferring the GST exemption to skip individuals releases the 40% GST tax.
Usually removing the assets from the grantor’s taxable estate, this helps to perhaps minimize estate tax obligations in their own generation.
Assets can stay in the trust for long periods, maybe for the complete “rule against perpetuities” (which varies by state), therefore enabling wealth to grow and benefit several generations without being subject to inheritance tax at each generation’s death.
Significant asset protection for inherited wealth comes from assets kept in a GST, which usually shelter from the creditors, lawsuits, and divorces of the beneficiaries.

Although a generation-skipping trust calls for careful design and execution, it can benefit wealth-minded donors trying to maximize taxes and protect their legacy for several generations. Before choosing whether a generation-skipping trust is the best option for you, be sure you completely understand the ramifications, expenses, and benefits by speaking with a seasoned estate planning attorney and tax expert. This is where Mohita Kaur’s knowledge is most valuable.

Advantages of a multi-generational wealth strategy based on a generation-skipping trust

For grantors and their future successors, a GST deftly mixes tax strategy and wealth preservation to produce significant advantages. The great benefits of creating a generation-skipping trust are summed up here:

The most convincing advantage is the possibility to avoid Generation-Skipping Transfer (GST) tax at every intervening generation. At each skipped generation, this can result in significant savings of up to 40% (current highest GST tax rate) of the transferred assets, so assuring a considerably higher proportion of wealth reaches the eventual beneficiaries.
Multi-Generational Wealth Transfer: A GST helps to distribute riches over several generations free from later estate or gift tax burden. This guarantees a lifetime financial basis for offspring and helps to preserve family wealth.
Assets kept inside a properly formed GST usually remain free from the creditors, divorces, and lawsuits of the beneficiaries. This offers heirs a strong layer of asset protection, therefore shielding the inherited money from unanticipated events.
Grantors, even for beneficiaries several generations distant, can control the terms and conditions of trust disbursements. This guarantees appropriate handling of inherited money and permits conditional distributions that example, for education, health, or particular benchmarks.
Families with large assets can use a GST as a single repository for family wealth, therefore enabling more effective administration and investment plans.
Eliminating items from the grantor’s taxable estate helps a GST significantly lower the grantor’s own estate tax obligation.
Although a well-written GST is irreversible, it might include clauses allowing some flexibility in future payouts or trustee changes, therefore meeting changing family requirements. Key Factors & Possible Drawbacks of a Generation-skipping Trust
Although generation-skipping trusts are complicated tools requiring careful thought and professional legal advice, their benefits are really significant.

Mohita Kaur makes sure her clients grasp all facets:

Legal Formalities and Complexity: Establishing a GST means negotiating somewhat complex legal and tax regulations, especially with relation to the distribution of the GST exemption. Constant attention is needed for the complex administrative, legal, and tax compliance issues.
Generation-skipping trusts are virtually always irrevocable, meaning once transferred the original assets cannot be retrieved by the donors and the choice cannot be undone. This dedication calls both rigorous consideration and a clear awareness of long-term objectives.
Involving attorneys and financial advisers in building and distributing the trust might result in large expenses including continuous monitoring, reporting, and legal compliance. Over several decades, professional trustee fees can be really large.
Investment Risk: Market risks associated with the trust’s assets could change their value with time. Good, long-term investment management is absolutely vital, sometimes requiring professional advice.
Though a useful instrument, the GST exemption is limited. Generation-skipping Transfer (GST) tax exemption
Taxation results from overfunding a GST over the exemption. Its best use must be maximized by careful preparation so as to avoid inadvertent tax repercussions.
Though many states have either changed or eliminated this regulation, allowing for very long-term or perpetual trusts, trusts are subject to the regulation Against Perpetuities, which limits how long assets may be maintained in trust, even built for multi-generational prosperity.
Once created, the grantor usually gives direct control over the assets. To properly handle and distribute the assets, beneficiaries rely on the trustee’s honesty and ability. thirty
Portability Issues: Generally speaking, the GST exemption is not movable between spouses unlike the federal estate tax exemption. This implies significant preparation is required to guarantee both partners properly apply their particular exemption. To decide whether creating a generation-skipping trust is appropriate for your estate plan depending on personal circumstances and goals, it is imperative to balance these possible negatives against the advantages and see a financial advisor and estate planning attorney. For clients in Northern California, Mohita Kaur’s thorough study becomes quite helpful here.

A generation-skipping trust’s cost: how much?

Establishing a generation-skipping trust can be somewhat expensive depending on the complexity of the estate, the attorney’s fees, and the jurisdiction selected. On these elements.

Mohita Kaur offers clear direction:

Legal fees for a simple GST could run from several thousand to tens of thousands of dollars. For estates including many assets, varied investments, or complicated family issues spanning several generations, these expenses might rise significantly.
Should a bank or professional trustee oversee the trust, costs might be a percentage of its assets annually, often ranging from 0.5% to 2%. Over decades, these fees build up and greatly influence the long-term expenses.
Administrative expenses include possible costs related to preparing and submitting tax returns for the trust (Form 709 – Gift Tax Return for lifetime GSTs, Form 706 – Estate Tax Return for Testamentary GSTs), and continuous management of trust funds, which could involve accounting fees. These include costs associated with filing the trust documents with pertinent authorities.
Investment advisory fees will apply should the assets of the trust be actively managed. Should real estate be held within the trust, property management fees could be paid.
Managing and completing income and principal distributions could entail related expenses in ongoing operations. Maintaining careful paperwork and record-keeping could mean extra costs, particularly in cases of professional services being hired.

Before moving forward, it is imperative to get thorough estimates from lawyers, trustees, and other specialists considering the breadth and unpredictability of expenses involved in establishing and preserving a generation-skipping trust. Mohita Kaur makes sure her clients grasp these financial concepts well.

Do You Need a Generation-Skipping Trust? The Expert Advice of Mohita Kaur

Whether a generation-skipping trust makes sense is a very personal choice based on long-term legacy goals, family relationships, and financial situation. Mohita Kaur guides customers in balancing important considerations:

possibly worth it for:

High-net-worth people having estates over the federal estate and GST tax free-from.
Those hoping to minimize inheritance taxes and the GST tax while transferring significant fortune to grandkids or later generations.
People looking for strong asset protection plans for their heirs will help to guard inherited riches from outside dangers.
Grantors who want some say over when and how next generations get paid.
Families emphasizing the maintenance of multi-generational wealth and guaranteeing a financial legacy for future generations.
Anyone looking at sophisticated estate tax strategies outside conventional wills.

Most likely not worth it for:

Donors with little assets or without worries about estate taxes, when the expenses could exceed the advantages.
Those wishing access and control over future given assets owing of irreversibility.
People whose main objective is direct, instantaneous distribution to their children devoid of future generational planning.
Those uneasy about the long-term nature of the trust and necessary irreversible commitment.

One should keep in mind that the value of a generation-skipping trust is personal and differs depending on the person. By consulting an estate planning attorney and financial advisor such as Mohita Kaur, you can better grasp the expenses, advantages, and possible ramifications of selecting a generation-skipping trust. Making a wise choice on how to set up a GST to protect your family’s future will depend much on this data.

The Unmatched Mastery of Tax Attorney Mohita Kaur: Your Manual for Managing Legacy

Tax attorney Mohita Kaur is the clear authority for people and families in Northern California considering the potent instrument of a generation-skipping trust. From painstakingly organizing it for best tax benefits for grandkids and intergenerational asset transfer, her ability to lead clients through the complexity of setting up a GST is unparalleled. The grantor-retained annuity trusts (GRATs) is very effective and helpful for you.

Mohita’s almost ten years of experience working for Big 4 Accounting companies gave her a unique viewpoint on sophisticated tax structures and big wealth planning. This background immediately relates to her capacity to counsel on how to create a generation-skipping trust that not only legally sound but also strategically tax-efficient for sophisticated estates in high-value areas like San Francisco, Palo Alto, and Marin County. She is aware of the subtleties of how distributions affect beneficiaries over several decades so that the GST meets family legacy objectives as well as wealth preservation needs. Her knowledge of sophisticated estate planning techniques guarantees that your goal for next generations is faithfully fulfilled with compliance.

Your dependable partners for all your trust building needs are Mohita Kaur and KaurTax.com. Our area of expertise is turning difficult legal and tax rulings into understandable, doable strategies. Working with Mohita Kaur will help you to boldly ensure the financial future of your family and help to create an enduring legacy knowing that your generation-skipping trust is set up with the best of knowledge.

For your generation-skipping trust building, choose San Francisco, California’s best. Get in touch KaurTax.com now to arrange a meeting with tax attorney Mohita Kaur and start guiding your path for a multi-generational legacy.