Definitions for "generation-skipping trust"
a trust that skips one or more generations (grandparent's trust for grandchildren that bypasses the parents)
A tax-saving trust, where the principal is left in trust for oneâ€(tm)s grandchildren (or any beneficiary two or more generations removed from the grantor), with the current beneficiaries (often the children) receiving only the trust income.
A trust having a beneficiary who is two or more generations younger than the grantor (called a "skip" person). A generation-skipping tax is imposed on gifts of more than $1.1 million in 2002 ($1.11 million in 2003; $1.5 million in 2004). This tax is in addition to any gift or estate tax on the same amount. (See Dynasty trust.)