Joseph C. Kempe

Ability to shelter wealth over multiple generations.
Protection against future estate and gift tax laws.
Protection of assets from divorce risks and rights of in-laws at death.
Ability to count many family members to enhance annual gifting ability, but can provide distributions on a preferential basis to certain groups of beneficiaries; i.e., children first, then grandchildren.
A spouse can be a lifetime beneficiary, but doing so may reduce gifting ability unless gift splitting is chosen.

1. Upon C3's death the assets can be divided equally amongst C1 and C2, since C3 has no children. See illustration above.

2. If you do not desire to transfer $22,000 times 8 family members because you are concerned about your financial security, an alternative is to have one of you, if you are married (the spouse with the shortest life expectancy - typically the husband), gift $11,000 per beneficiary with the other spouse (typically - the wife) as the primary beneficiary until death. Only then do the assets divide for the benefit of the children and their families, but the assets gifted are removed from your taxable estate.

^1/ $11,000 may be increased to $21,000 if married.