Generation-Skipping Trusts in 2026: How Retirees Can Pass Wealth to Grandchildren

What: Generation-skipping trusts (GSTs) allow retirees to bypass inheritance taxes and pass wealth directly to their grandchildren.
Why: GSTs are particularly useful for retirees with large estates, as they can help avoid estate taxes and ensure the long-term financial security of their grandchildren.
Signal: The IRS has set the GST exemption at **$12.92 million** for 2026, meaning that retirees can transfer up to this amount to their grandchildren without incurring additional taxes.
Target: Retirees should consider setting up a GST when their children are still alive, as this can help minimize estate taxes and ensure a smooth transfer of wealth.
Risk: Failing to properly establish a GST can result in unintended tax consequences, so retirees should consult with a qualified financial advisor to ensure their trust is set up correctly.