Generation-skipping transfer taxation encompasses the rules determining when GST tax applies, how to allocate GST exemption, and how to compute the inclusion ratio for trusts receiving exempt and non-exempt transfers. Events such as taxable distributions and taxable terminations trigger GST. Accurate gift and estate returns memorialize allocations and elections. Coordinating GST with estate-tax apportionment,dynasty trusts, and charitable planning preserves exemption value across generations while meeting governance and distribution goals for heirs.

Advisors coordinate GST allocations with trust design and distribution policies to avoid inadvertent taxable distributions or terminations. Clear records and synchronized returns preserve exemption value across generations.