Generation Skipping Tax

[Burke]

Decedent left brokerage account to grandchildren via the will establishing a trust for them. It appears that both the Estate Tax and GST Tax exemptions are the same, i.e, $5,250,000 through 2013. No 706 was filed as the gross estate (including this brokerage account) was nowhere close to this amount. Should it have been filed due to GST rules to establish no GST tax for future distributions?

[Roland Slugg]

Nope. The exemption is uniform. If no estate tax return was required to be filed, the skip bequests are irrelevant.

[TAXNJ]

Little more

Decedent left brokerage account to grandchildren via the will establishing a trust for them. It appears that both the Estate Tax and GST Tax exemptions are the same, i.e, $5,250,000 through 2013. No 706 was filed as the gross estate (including this brokerage account) was nowhere close to this amount. Should it have been filed due to GST rules to establish no GST tax for future distributions?

See if attached has any info that may apply if spouse involved or other revelant info to your scenario. Some practioners file the 706 even if not required or if state inheritance tax requires.

http://wills.about.com/od/understandingestatetaxes/qt/estatetaxreturn.htm

[Burke]

Thanks for the link. Trust Dept of bank is calling about this and I want to have my ducks in a row when I talk to them. There is no surviving spouse to preserve DSUE and no inheritance or estate tax in VA. I can find no shortage of information on Estate taxes, but precious little about the GST specifically, that is clearly written. The instructions for 706 are pretty clear about the Schedules R-1, etc. What else is out there seems to indicate the GST (if required) is payable by the trust and apparently may occur when distributions are made later. Interesting that I have two of these this year. No 706 required on this one, but it was on the other (prepared out of state by the executor/attorney, and I have the GSST Trust to do now for the bene.)