Legal Definitions - deemed transferor

A deemed transferor is a person who holds an interest in a generation-skipping trust on behalf of a beneficiary. When this person dies, the generation-skipping transfer tax is imposed. This person is often a child of the settlor.

Let's say a grandfather establishes a trust with income payable for life to his son. The remainder of the trust goes to his grandson, who is also known as the skip person. When the son dies, the trust will be included in his gross estate for determining the generation-skipping transfer tax. In this example, the son is the deemed transferor.

This definition is important for understanding the tax implications of generation-skipping trusts and how they are passed down through generations.