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Navigating the Generation-Skipping Transfer Tax for Hertz Global Holdings Families

Healthcare Provider Update: Healthcare Provider Information for Hertz Global Holdings Hertz Global Holdings typically utilizes the services of UnitedHealthcare. This relationship provides its employees with access to a range of healthcare options, including comprehensive medical coverage and health savings accounts to help manage rising healthcare costs. Potential Healthcare Cost Increases in 2026 As we approach 2026, employees of Hertz Global Holdings should prepare for significant healthcare cost increases, driven primarily by sharply rising premiums in the Affordable Care Act (ACA) marketplace. Data indicates that some states may see premium hikes exceeding 60%, exacerbated by factors such as inflated medical costs and the potential expiration of federal premium subsidies. With more than 92% of ACA policyholders facing potential out-of-pocket increases of over 75%, these economic pressures could strain budgets and access to healthcare coverage for many Hertz employees in the upcoming year. Click here to learn more

'Thoughtful multigenerational planning can help Hertz Global Holdings employees navigate GSTT considerations more effectively, making it an essential part of preparing families for long-term financial transitions.' -- Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'Carefully structuring multigenerational wealth transfers can help Hertz Global Holdings employees stay aligned with GSTT rules and should be considered when discussing long-term family planning priorities.' -- Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

Key concepts behind the generation-skipping transfer tax (GSTT).
Common exemptions and exclusions that may lessen transfer tax exposure.
Planning methods that can help families pass wealth across generations.

Important Takeaways on How to Transfer Wealth Across Generations

The generation-skipping transfer tax (GSTT) is relevant for any Hertz Global Holdings employees transferring wealth to grandchildren or other individuals that skip over your children's generation.

Both GSTT and gift or estate taxes may apply when transferring assets to heirs more than one generation below the transferor.

Exemptions may lower transfer tax liability if planning is structured thoughtfully.

Federal gift and estate taxes—applicable to transfers during life or at death—are familiar to many Hertz Global Holdings employees. However, when assets move to people more than one generation below the transferor, such as a gift from a grandparent to a grandchild, the federal generation-skipping transfer tax (GSTT) may also apply.

Generation-Skipping Transfer Tax: What Is It?

Transfers to “skip persons,” those more than one generation below the transferor or more than 37½ years younger, are subject to the GSTT. This federal tax applies in addition to any federal gift or estate tax due and equals the highest federal gift and estate tax rate in effect—a flat rate of 40%—which is relevant for Hertz Global Holdings employees engaging in multigenerational planning.

The GSTT was introduced in 1976 to address concerns that affluent families could shift assets in ways that bypassed estate taxes at each generational level. ¹

Lifetime Exemptions and Gift Tax Exclusions

Transfers made during life or at death to anyone other than a spouse or qualified charity may be subject to federal gift or estate tax. Key exclusions include several that may benefit Hertz Global Holdings employees:

Annual gift tax exemption: In 2026, individuals may give up to $19,000 per recipient without incurring federal estate or gift tax. Couples may combine exclusions for a total of $38,000 per beneficiary. ² For example, a married couple with two children could give $76,000 total ($38,000 to each child) annually without gift tax.

Qualified transfers: Payments made directly to educational institutions for tuition or to medical providers for medical expenses are not considered taxable gifts. There is no dollar limit on these transfers. ¹

Lifetime unified exclusion: Individuals may transfer up to $13.99 million (or $27.98 million per married couple) during life or at death without federal gift or estate tax. ² Lifetime gifts reduce the remaining exclusion available at death.

Transfers exceeding these exclusions are taxed at the top federal estate and gift tax rate of 40%.

Exclusions & Exemptions from GSTT

The GSTT has rules similar to traditional gift tax laws, which can influence planning for Hertz Global Holdings families:

- Grandparents may give up to $19,000 directly to a grandchild in 2026 without triggering gift tax or GSTT.
- Each individual has a $13.99 million lifetime GSTT exemption ($27.98 million per couple), though this exemption is not independent from estate or gift tax rules.
Transfers above exemption thresholds are subject to a 40% GSTT.
GSTT applies only at the federal level, although some states may impose their own estate or inheritance taxes.

When Does the GSTT Start to Apply?

The GSTT applies to three types of taxable events, all of which may arise in multigenerational planning for Hertz Global Holdings families:

Direct skips: Transfers made directly to a skip person or to a trust for their exclusive benefit. The transferor or their estate pays the tax.

Taxable distributions: Distributions from a trust to a skip person. The beneficiary pays the tax.

Taxable terminations: Occur when a trust interest ends and only skip persons remain as beneficiaries. The trustee pays the tax.

GSTT Exemption Allocations

Transfers—outright or to a trust—may qualify for GSTT exemption as long as the exemption is properly allocated. Once allocated, all future growth on those trust assets is generally free from GSTT, a strategy Hertz Global Holdings families may want to use.

For example, if a person contributed $10 million to an irrevocable trust for grandchildren in 2024 and allocated the GSTT exemption, and the trust later grew to $20 million, future distributions would not incur GSTT. ¹

Methods for Lowering GSTT

1. 529 Plan Contributions

Contributions to 529 college savings plans are treated as completed gifts, even though account owners can change the beneficiary. Grandparents may “superfund” a 529 plan with five years of annual exclusions at once—up to $95,000 per beneficiary in 2025 or $190,000 per beneficiary for a married couple filing jointly ³ —which may interest Hertz Global Holdings retirees.

2. Dynasty Trusts

Dynasty trusts are irrevocable trusts designed to last across multiple generations. Some states allow long-term or perpetual trusts, while others limit trust duration under the “rule against perpetuities.” These trusts can combine GSTT planning with long-term asset preservation features and, when fully exempt from GSTT, future distributions or terminations can occur without additional GSTT ⁴ —an appealing option for extended family planning.

Concluding Remarks

Although GSTT planning can be complex, exemptions and structured transfers may help Hertz Global Holdings employees reduce or eliminate federal taxes on wealth passed to grandchildren or other skip persons.

The Retirement Group can assist you with wealth transfer planning and retirement income strategies. Call our team at (800) 900-5867 for guidance.

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Articles you may find interesting:

Sources:

1. Fidelity Investments. “Understanding the Generation-Skipping Transfer Tax.” Fidelity , 3 Oct. 2025, www.fidelity.com/viewpoints/wealth-management/insights/generation-skipping-transfer-tax .

2. Internal Revenue Service. “ IRS releases tax inflation adjustments for tax year 2027 .” IRS.gov , 9 Oct. 2025.

3. Bendig, Erin. “How This 529 ‘Superfund’ Strategy Can Transform Your Estate Plan.” Kiplinger , 12 Sept. 2025, www.kiplinger.com/personal-finance/this-super-529-strategy-can-help-you-jumpstart-college-savings .

4. Investopedia. ' What Is a Dynasty Trust? ' by Will Kenton. 31 March 2025.

How does The Hertz Corporation's pension plan ensure that employees are fairly compensated for their years of service, and what specific criteria does The Hertz Corporation use to determine eligibility for benefits under the Account Balance Defined Benefit Pension Plan?

Fair Compensation for Years of Service: The Hertz Corporation's pension plan ensures employees are fairly compensated for their years of service by granting Compensation Credits as a percentage of eligible pay. Eligibility for benefits starts once employees have at least 1,000 Hours of Service in a 12-month period, ensuring that benefits are proportional to service time. Benefits become vested after three years of service, securing an employee’s accumulated benefits.

In what ways do the Compensation Credits and Interest Credits contribute to the growth of an employee's retirement account within The Hertz Corporation's pension plan, and how does the company guarantee these credits are applied accurately throughout an employeeâ€™s tenure?

Growth of Retirement Account: Within The Hertz Corporation's pension plan, Compensation Credits and Interest Credits contribute to the growth of an employee's retirement account. Compensation Credits are calculated as a percentage of the employee’s eligible pay, and Interest Credits grow the account balance annually based on a preset rate, ensuring a systematic increase in the retirement funds over an employee's tenure.

What are the implications of the freeze date on participation in The Hertz Corporation's pension plan, and how might this affect current employees who are considering their retirement options within the next few years?

Implications of Freeze Date: The freeze date impacts current employees by discontinuing the accrual of new Compensation Credits. Employees enrolled in the plan before the freeze date retain their accrued benefits, but no new benefits will be added post-freeze. This could influence current employees' decisions on retirement timing and financial planning.

How does The Hertz Corporation handle claims for pension benefits, and what processes are in place for employees to appeal denied claims according to the guidelines set out in the Account Balance Defined Benefit Pension Plan?

Claims for Pension Benefits: The Hertz Corporation handles claims for pension benefits through a detailed procedure where employees can file a claim with the Committee. If denied, the employee can appeal the decision. This process ensures that employees have a structured avenue for resolving disputes regarding their pension benefits.

Under what circumstances can an employee of The Hertz Corporation be considered fully vested, and how does vesting impact an employee's future retirement benefits?

Vesting and Impact on Retirement Benefits: Employees of The Hertz Corporation are considered fully vested in their pension benefits after three years of service, which secures their right to pension benefits accrued till that point. Vesting ensures that upon leaving the company, employees are entitled to their accumulated benefits, directly impacting their financial stability in retirement.

How do The Hertz Corporation's pension benefits compare to other companies in the industry, especially in terms of contribution percentages and payment options available upon retirement?

Comparison with Industry Standards: The pension benefits at The Hertz Corporation, which include both Compensation and Interest Credits, are competitive within the industry, particularly because the company covers the full cost of the plan. The option to receive benefits as a lump sum or an annuity upon retirement provides flexibility compared to other industry plans.

Can you explain the process and the timeline involved for receiving pension benefits after retirement from The Hertz Corporation, including any choices that the retiree must make regarding payout methods?

Receiving Pension Benefits Post-Retirement: The timeline and process for receiving pension benefits after retirement involve choosing a payout method (lump sum or annuity) and filing a claim. Benefits can start as early as age 55 for early retirement, or at the normal retirement age of 65, with the account continuing to accrue Interest Credits until the benefits commence.

What resources does The Hertz Corporation provide to employees looking to understand their rights and benefits under the Employee Retirement Income Security Act (ERISA), and how can this information assist employees in making informed retirement decisions?

Resources on ERISA Rights: The Hertz Corporation provides resources to help employees understand their rights under ERISA through its pension plan website and support center. This information helps employees make informed decisions about their retirement planning by clarifying their rights and benefits under the plan.

What procedures should an employee at The Hertz Corporation follow to update their personal information or beneficiary designations in their pension account, and why is it crucial to keep this information up to date?

Updating Personal Information: Employees at The Hertz Corporation are encouraged to update their personal and beneficiary information via the Hertz Pension Center website. Keeping information current is crucial for ensuring that all communications and benefits are correctly handled, especially for claims and beneficiary designations.

If employees of The Hertz Corporation have questions or require further information regarding the pension plan, what steps should they take to contact the company, and what information will they need to facilitate their inquiry?

Contacting for Further Information: For further inquiries about the pension plan, employees should contact the Hertz Pension Center. This center provides access to plan details and assistance for any additional information required by employees, ensuring transparency and accessibility in managing their retirement benefits.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Hertz Global Holdings Pension Plan Name of Pension Plan: Hertz Global Holdings Pension Plan Years of Service and Age Qualification: Employees are eligible for the pension plan if they have a minimum of 5 years of service and are at least 55 years old. Pension Formula: The pension benefit is calculated based on the employee's years of service and their average salary over the highest 5 consecutive years. Source Document and Page Number: Hertz Global Holdings 2022 Annual Report, Page 34. Hertz Global Holdings 401(k) Plan Name of 401(k) Plan: Hertz Global Holdings 401(k) Plan Eligibility: Employees are eligible to participate in the 401(k) plan immediately upon hire. Contribution Details: Hertz Global Holdings matches employee contributions up to 6% of the employee’s salary.

Restructuring and Layoffs: Hertz Global Holdings has undergone significant restructuring in 2023, which included a series of layoffs aimed at streamlining operations and reducing costs. This restructuring aligns with their strategy to better position the company for future growth amid a challenging economic environment. It is crucial to address this news due to the current economic uncertainties and evolving investment landscape, as these changes can have a direct impact on the company's stability and employee security. Benefit Changes: Hertz has also adjusted its employee benefit plans, including modifications to health insurance and retirement contributions. These changes are part of a broader effort to manage costs and adapt to shifting market conditions. The adjustments to benefits are important to note because they reflect broader trends in corporate benefit strategies and can influence employees' financial planning and overall job satisfaction.

Hertz Global Holdings provides stock options and RSUs as part of its employee compensation packages. These financial incentives are designed to attract and retain talent by offering shares or the right to purchase shares at a set price. Typically, these are outlined in the company's annual reports or SEC filings. Hertz Global Holdings offers stock options and RSUs under its equity incentive plans. The details of these plans, including the number of shares and vesting schedules, are outlined in the company’s SEC filings. Employees in specific roles or levels may qualify for these benefits. Hertz Global Holdings often includes details about stock options and RSUs in its financial disclosures. This information is available in the company's annual reports and Form 10-K filings. The specifics of the grants, including vesting conditions and eligibility, are detailed in these documents.

Hertz Global Holdings Official Site: The official website typically provides general benefits information, including healthcare coverage. Key benefits include medical, dental, and vision insurance options. They also offer flexible spending accounts (FSAs) and health savings accounts (HSAs). Glassdoor: Employee Reviews: Reviews on Glassdoor often mention the company's healthcare benefits. For Hertz, employees have reported competitive health insurance plans with comprehensive coverage. They highlight benefits such as access to major networks and coverage for preventive care. Indeed: Company Benefits: Indeed lists employee feedback and detailed information about health benefits. Hertz employees have noted that the company provides a robust benefits package, including health insurance with options for various plans and coverage levels. LinkedIn: Company Updates: Hertz posts updates about their benefits and wellness programs on LinkedIn. Recent posts indicate that Hertz has focused on enhancing mental health support and telemedicine services as part of their employee benefits. Benefits Administration Sites: Third-Party Benefits Administration: Some third-party sites offer detailed breakdowns of Hertz’s benefits packages, including the specifics of medical, dental, and vision plans. They often include information on coverage levels, co-pays, and deductibles.