What are the gift and transfer tax implications of changing the beneficiary?
A permissible change of the beneficiary will be treated as a gift from the previous beneficiary to the new beneficiary if the new beneficiary is one or more generations younger than the beneficiary being replaced. If the Account Owner changes the beneficiary to a new beneficiary who is more than one generation younger than the previous beneficiary, the generation-skipping transfer tax may be triggered.
A permissible change of the beneficiary will be treated as a gift from the previous beneficiary to the new beneficiary if the new beneficiary is one or more generations younger than the beneficiary being replaced. If the account owner changes the beneficiary to a new beneficiary who is more than one generation younger than the previous beneficiary, the generation-skipping transfer tax may be triggered. Note: For transfers in 2010, there is no generation-skipping transfer tax. Please consult your tax and financial advisers for further information.
