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Identifying Skip and Non-Skip persons.

Course: Estate Planning
Lesson 7: Transfer Taxation IV – Generation Skipping Transfers

Student Question:

Wouldn’t Ellen be a non-skip person since Jane is deceased and she bumps up the ladder one step to be just one generation behind?? (See question below in which Ellen is identified as a skip person.)

Question 1: The following chart shows the family tree of Sam and Sarah Parker. Their son Jack plans to make a number of transfers. Based on this chart, would Ellen be a skip or non-skip person?

Thanks,
Jay

Instructor Response:

Hey Jay-

Good to hear from you.  Glad you ask this question because it’s one that is easy to miss. When dealing with lineal transfers, only when there are no lineal descendants in one generation, will anyone from the generations below move up. So, if Jack had no surviving lineal descendants, then yes, Ellen would move up. But because he still has Anne and Sue as lineal descendants, Ellen remains a skip person.  A confusing subject, to be sure.

Let me know any other questions.  Have a great weekend.

Dan