Question

With $5,100,000 Paul's will creates a trust with the following provisions: life estate to Jacob (Paul's son) and remainder to Anastasia (Paul's granddaughter and Jacob's daughter). Jacob dies when the value of the trust is $7,650,000.

Required:
When does the generation-skipping transfer result?

Answer 1

Answer:

The generation-skipping transfer results in the lifetime of Anastasia (Paul's granddaughter and Jacob's daughter).

Explanation:

a) Data:

Value of the Generation-skipping Trust created by Paul = $5,100,000

Value of the Generation-skipping Trust when Jacob dies = $7,650,000

b) Paul's generation-skipping trust (GST) is a type of legally binding trust agreement in which the contributed assets worth $5,100,000 in this instance are passed down to Paul's grandchildren and Jacob's children (Anastasia) when they are worth $7,650,000.  This "skipping" skips the next generation, that is, Paul's children (Jacob).