Generation-skipping trust guide

A generation-skipping trust is reviewed when a family wants trust assets to benefit grandchildren or later generations under a controlled trustee structure. These trusts often come up in larger estate plans because the tax rules, transfer design, and duration questions are more complex than an ordinary family trust.

Last reviewed: March 9, 2026

Reviewed against: trust and estate planning references listed on the sources page.

Publisher: Larry Trustee AI Editorial Team | hello@larrytrustee.ai

How a generation-skipping trust works

The trust can hold assets for one or more generations while setting rules for who may receive income, principal, or discretionary support. Some families use this kind of trust to avoid outright distributions at each generation and instead keep property under trustee oversight for a longer period.

Where GST tax review matters

Generation-skipping planning usually raises generation-skipping transfer tax questions. That is why these trusts are commonly reviewed with tax-aware estate planning counsel. The trust language, exemption allocation, trustee powers, and distribution standards all matter when the goal is multi-generation planning.

Why families compare this trust with other structures

To keep family assets under trustee control beyond one generation.
To coordinate long-term beneficiary protections with spendthrift or discretionary standards.
To compare outright inheritance planning with long-duration trust planning.
To review whether a revocable trust, testamentary trust, or dynasty-style structure is a better fit.

What should be reviewed before using one

Whether the trust duration is allowed under the governing law.
Whether GST tax allocation and beneficiary classes are clearly defined.
Whether trustee discretion is broad enough for future generations.
Whether the family wants continuing control or simpler outright distributions.

Questions people ask about generation-skipping trusts

What is a generation-skipping trust?

A generation-skipping trust is a trust reviewed for transfers that may benefit grandchildren or later generations instead of passing directly to children.

Why do families review generation-skipping trusts?

Families review them for long-term control, staged distributions, multi-generation planning, and potential GST tax analysis.

Is a generation-skipping trust the same as a dynasty trust?

Not exactly. A dynasty-style trust may use generation-skipping planning concepts, but the exact structure depends on state law, trust duration, and tax design.