Generation-Skipping Transfer Tax - GSTT

Ah, inheritance. The highest margin (legal) business on the planet. And that business is getting harder.

After mondo political pressure, tax laws changed, such that grandparents couldn't tax-lessly gift to their grand-and-great-grandchildren without being punished.

And the punishment is severe. A grandparent owns a plumbing and parts supply business worth $6 million, a plot of land, and a small home in an urban area worth $5 million, and has $7 million in investments. He dies, and $12 million passes through without tax. The remaining $6 million is taxed once for passing from grandparent to parent at about 50%, so the $6 million becomes $3 million...then that money is taxed again at about 50%, becoming $1.5 million by the time it reaches the grandkids' pockets.

American tax law makes it almost impossible to "maintain legacies" anymore without all kinds of gymnastics, wherein money is donated to a charity, which then pays a fat salary to ne'er-do-well grandkids to manage it, or other skeezy financial dealings.

Bottom line, grandparents: spend your money while you're alive.