What if you could give your children assets in a trust and they could use them and yet they’d avoid estate taxation at their death? That’s what a “Generation-Skipping Transfer” Trust, or “GST” trust does. It is a trust which is designed to avoid estate taxation at the death of the beneficiary.
During the life of the beneficiary, the assets in the trust are used for their health, education, maintenance, and support. After the beneficiary’s death, the assets go to their own children. The beneficiary may be given a power to decide how the assets will be split among their descendants at their death. Yet, the assets still wouldn’t be included in the beneficiary’s taxable estate.