Direct skip is a transfer subject to the generation-skipping transfer (GST) tax in which property is given directly to a skip person"usually a grandchild or someone more than one generation below the donor"or to a trust that is treated as a skip. Because the transfer bypasses the donorTMs children, GST tax may apply in addition to or instead of gift or estate tax, subject to available GST exemptions. Direct skips must be reported properly to allocate or elect out of GST exemption and to avoid unintended tax costs in multigenerational wealth plans.

Advisors and estate planners address direct skips when clients want to leave assets, including life insurance proceeds, directly to grandchildren or skip-person trusts. They coordinate with CPAs to file required gift or estate tax returns and to allocate GST exemption strategically. Life insurance trusts can be designed as GST exempt so death benefits pass to future generations without additional transfer tax. Understanding direct skips helps advisors prevent accidental GST exposure and align beneficiary strategies with long-term multigenerational goals.