Wednesday, September 5, 2012
Robert Moshman (Professional Writer and Attorney) recently published his article entitled Avoiding a GSTT Asteroid*: Revisiting a dangerous Adversary: The Generation-Skipping Transfer Tax, 4 Est. Plan. & Community Prop. L.J. 281 (2012). The introduction to the article is below:
It hit with the force of 10,000 nuclear weapons. A trillion tons of dirt and rock hurtled into the atmosphere, creating a suffocating blanket of dust the sun was powerless to penetrate for a thousand years. It happened before. It will happen again. It’s just a question of when.
The odds that an estate will run afoul of the generation-skipping transfer tax (GSTT) may be slim nowadays, but estate planners must never let down their guard against this virulent adversary. The GSTT sneaks up without warning and packs a powerful punch. Just the convoluted process of calculating this tax can send an estate planning professional into a black hole of despair.
This article will review GSTT rules and strategies. First, however, to set the GSTT in proper context, we must travel back through the time-space continuum to a more innocent time, before the GSTT existed, when the estate tax was the primary opponent for estate planning.
* “Avoiding a GSTT Asteroid” was originally published in the August 1998 issue of The Estate Analyst. About one-third of that issue consisted of footnotes due to the author’s youthful infatuation with trivia. This article was then rewritten and published in the March/April 1999 issue of the ABA’s Property & Probate journal. This new version is produced with updates for inclusion in a textbook by Professor Gerry Beyer.