All the following statements concerning the generation-skipping transfer tax rules are correct EXCEPT:

A. No generation-skipping transfer tax (GSTT) is levied unless either the life-income beneficiary or the remainderman are two or more generations younger than the grantor.

B. The purpose of the GSTT is to exact a tax essentially equivalent to the estate tax that would have been levied if the property had been passed outright to the beneficiary, rather than just a life interest.

C. When a grantors child dies after possessing a life interest, the estate of the next generation beneficiary is liable for the GSTT.

D. Upon the death of the grantor, the GSTT rules still apply where the trust bypasses the grantors living son or daughter and names the sons or daughters child as the beneficiary.