(Wall Street Journal) — It isn’t just the estate tax that’s scheduled to return on Jan. 1 after a one-year absence. A lesser-known companion levy will return as well: the generation-skipping transfer tax. Not surprisingly, affluent families are rushing to transfer wealth to their progeny before the year-end deadline. But while sidestepping the GST tax may seem like a smart move, investors need to structure and time gifts to minimize the risks of a future tax hit. First enacted in the 1970s, the GST tax is designed to prevent wealthy families from giving assets to grandchildren instead of children in order to trim their tax bills. Donors can transfer a limited amount free of GST tax to relatives two or more generations their junior, or to nonrelatives at least 37½ years younger. (In 2009, that amount, known as an exemption, was $3.5 million.)
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