What is a generation-skipping trust?

A generation-skipping trust passes assets to your grandchildren, or others at least two generations below you, rather than to your children. The point is to avoid having the money taxed twice, once when it passes to your kids and again when it passes to their kids. There's a separate generation-skipping transfer tax, but it shares the same 15 million dollar exemption as the estate tax. These trusts mainly benefit wealthier families with significant assets.