Have you thought about the end of your life and how to handle your assets after you’re gone? Estate planning covers a wide range of important topics, including financial power of attorney, health care proxy, beneficiaries, probate, wills, trusts, executors and estate and inheritance taxes.
A will is a legal document that outlines how a person's assets will be distributed after their death, while a trust is a legal arrangement where a trustee manages assets for the benefit of beneficiaries, with greater flexibility and potential tax benefits than a will.
The generation-skipping transfer tax was created by Congress in 1976 to close a loophole that allowed individuals to avoid estate taxes. The tax applies to assets given to grandchildren, great-grandchildren, or any younger recipient that bypasses one generation and could trigger a tax liability even for establishing a trust.