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GENERATION-SKIPPING TRUST

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

A trust designed to save on estate tax by passing the money through levels of family’s descendants. The principal of the trust goes solely to the grandchildren as beneficiaries. The children receive only trust income. As a result, the children (second generation) never legally own the property (or corpus) of the trust and thus it isn’t taxable to them and their estate at their death.

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