Shrewsbury Generation-Skipping Planning Lawyers
Estate planning is about more than deciding who receives your assets after you pass away. For many families, it’s also about ensuring long-term security, preserving wealth across multiple generations, and minimizing the impact of taxes. One powerful strategy for accomplishing these goals is generation-skipping planning.
At Sanvenero & Cittadino, LLC, we help individuals and families throughout Central Jersey and the northern Jersey Shore explore and implement estate planning techniques that protect their wealth now and for years to come. If your financial and family circumstances call for advanced planning strategies, our Shrewsbury estate planning attorneys can guide you through the options and create a plan tailored to your unique goals.
What Is Generation-Skipping Planning?
Generation-skipping planning is a form of estate planning designed to transfer wealth directly to your grandchildren or later descendants, rather than passing it first to your children. This approach “skips” a generation for tax purposes, which can significantly reduce or even eliminate estate taxes that might otherwise apply at multiple points.
For example:
- Without generation-skipping planning, assets pass from grandparents to parents (taxable), and then from parents to children (taxable again).
- With generation-skipping planning, assets pass directly from grandparents to grandchildren, potentially avoiding one layer of taxation.
This strategy can be particularly valuable for families with significant wealth or assets that are expected to appreciate over time.
The Generation-Skipping Transfer Tax (GSTT)
The federal government imposes a generation-skipping transfer tax (GSTT) on transfers to individuals more than one generation below the donor, such as grandchildren. This tax is in addition to estate or gift taxes. However, each individual is allowed a GST tax exemption, which can be allocated strategically to maximize wealth preservation.
Because the GSTT rules are complex and often change with federal tax laws, professional guidance is essential. At Sanvenero & Cittadino, LLC, we help you understand how these rules apply to your situation and structure your plan to take full advantage of available exemptions and opportunities.
Tools for Generation-Skipping Planning
Several estate planning tools and strategies can be used in generation-skipping planning. Common examples include:
- Generation-Skipping Trusts: A trust designed to transfer assets directly to grandchildren while allowing children to benefit during their lifetime without technically owning the assets.
- Irrevocable Trusts: By removing assets from your estate, these trusts can reduce estate tax exposure and preserve wealth for future generations.
- Dynasty Trusts: In states that allow them, dynasty trusts can preserve wealth for multiple generations, sometimes for hundreds of years.
- Charitable Trusts: For families who want to combine philanthropy with wealth preservation, charitable trusts can offer both tax benefits and legacy building.
Our attorneys work closely with you to determine which structures align with your family’s goals and financial picture.
Why Families Choose Generation-Skipping Planning
Clients often pursue generation-skipping planning for reasons beyond tax savings. This strategy also allows families to protect wealth from potential creditors, lawsuits, or divorces involving their children. It can also ensure that assets are used to benefit future generations directly, while creating a legacy of financial stability for grandchildren and great-grandchildren. This approach can also provide funds for specific purposes, such as education, healthcare, or starting a business. With thoughtful planning, you can make sure that your resources support your family’s needs for decades to come.
Customized Strategies for Every Family
Generation-skipping planning is not a one-size-fits-all solution. It requires a careful review of your family structure, assets, goals, and potential tax exposure. At Sanvenero & Cittadino, LLC, we analyze your estate to determine whether generation-skipping strategies are appropriate. Our lawyers take the time to explain the potential benefits and limitations of each available tool. We draft trusts and other planning documents sensitive to the particularities of federal and New Jersey law, and we take measures to coordinate your generation-skipping plan with the rest of your estate plan, including wills, powers of attorney, and healthcare directives. Our goal is to help you create a comprehensive plan that protects your loved ones today and long into the future.
Talk to a Shrewsbury Estate Planning Attorney About Generation-Skipping Planning
Advanced estate planning requires careful thought and experienced legal guidance. At Sanvenero & Cittadino, LLC, we are here to help you understand your options, preserve more of your hard-earned wealth, and create a meaningful legacy for the next generation and beyond. Call our office today to schedule a consultation with one of our Shrewsbury estate planning attorneys.