In my (unpublished) "Dynasty" novel, the (American) patriarch leaves his German estate to his favorite (German) grandaughter. Like many American millionaires, he uses a "generation skipping trust" to save on inheritance taxes, bypassing his children(including the girl's mother), so the girl can inherit directly.

Is there such a thing as "generation skipping trust" in Germany? If not, what is the German equivalent? And in either case, how would you say it in German?

Googe translate gives me "Generation übersprungen Vertrauen" Is this right?

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  • @Em1: Two questions: 1) Is there an INHERITANCE tax in Germany? 2) Is there a way to prevent "double taxation" by passing something directly to the grandchildren, instead of to the children (taxed once) and then the grandchildren (taxed a second time)?
    – Tom Au
    Apr 23, 2013 at 14:47
  • No idea. Not my field.
    – Em1
    Apr 23, 2013 at 17:55
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    1. Yes. 2. Yes, you can pass to anyone you like under German law (“Testierfreiheit”), including your grandchildren (or even great-grandchildren) and non-relatives. There is no special generation-skipping tax; however, the taxable amount may differ: A child only pays inheritance tax for the amount exceeding € 400000, whereas the deduction for a grandchild (where the child is still alive) is only € 200000 and for great-grandchildren € 100000.
    – chirlu
    May 11, 2015 at 23:24

3 Answers 3


Vermögensverwaltung is indicative of an organization, as in Trust Organization, as per the usage of verwaltung, so this is probably incorrect.

Vertrauen has to do with the noun-form of the English verb trust, and not to do with finance.

I looked up double-taxation (Doppelbesteuerung) on wikipedia.de, and found that it seems as though it does not apply to trust funds, which are Treuhandfonds.

This idea of generation-skipping in order to avoid double taxation appears to be an American and British problem, and as such the term does not translate to German, so I would probably avoid it, unless you decide to come up with fictitious reasoning for it. -- it appears that I am incorrect about this - refer to Olaf's answer for more detail.

In cases like this, where terminology doesn't directly translate, it is usually better to describe the object in question, when translating it to German. You could, for example say something like, "A trust fund designed for the grandchildren to inherit in order to avoid granting rights to the children..."

Another potential way to put it is Geschlossener fonds, which is a closed or locked fund, which according to http://www.investorguide.com/article/11813/generation-skipping-trusts-and-why-they-are-advantageous-igu/ is pretty much what a generation-skipping trust fund is. Though I'm still not certain that the usage is correct.

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    A geschlossener Fonds is not "pretty much what a generation-skipping trust fund is", nor does the "Investor Guide" page that you link say so. Apr 23, 2013 at 17:03
  • Welcome to the site. Brilliant, "American," answer (relative to my needs). An upvote, and possibly an acceptance for you (but I like to wait a day or two for the latter).
    – Tom Au
    Apr 23, 2013 at 17:48

First of all, Google translations are almost never correct - in your case, the German is grammatically wrong.

As far as I know, there is no direct, catchy translation. In Germany the concept is mostly called "Überspringen einer Generation" or even "Generation-Skipping" as well, and it refers to inheritance in general. In some cases people do it because they don't trust their own children (I know of a case), or it may make sense to distribute the money and save some taxes, depending on circumstances (check http://www.stb-scheck.de/steuern/privatkunden/erbschaftsteuer-und-schenkungsteuer-beratung.html or http://www.sueddeutsche.de/geld/erbschaftssteuer-und-schenkungen-wenn-der-enkel-ein-vermoegen-bekommt-1.1259464 for more information). I don't think there is something that refers specifically to a "trust".

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    I asked the question because, "Google translations are almost never correct." But put it in to show "research effort."
    – Tom Au
    Apr 23, 2013 at 13:42
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    @Tom Au: Do you think trying an extremely easily searchable source known to be almost always incorrect really counts as 'research effort'? =]
    – Tara B
    Apr 25, 2013 at 16:20
  • @TaraB: I am 55 years old, and not good with the net. So ANY online search represents effort for me. It is not "extremely easy." I could also talk about consulting "paper" sources. More to the point, I've "rounded up the usual suspects."
    – Tom Au
    Apr 25, 2013 at 17:16
  • @TomAu: Sorry, I hope you didn't find my comment insulting. I was just teasing. (Having parents around your age, I do realise that what is trivial to do on the internet for someone my age can feel less trivial to people who didn't more or less grow up with the internet.)
    – Tara B
    Apr 25, 2013 at 18:14
  • @TaraB: And I'll tease back by asking you if you know which movie the expression "round up the usual suspects" comes from?
    – Tom Au
    Apr 25, 2013 at 18:49

I'd translate it to "generationsüberspringende Vermögensverwaltung", not nice I know.

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