Free generation-skipping transfer tax (GST) calculator. Estimate GST liability at the flat 40% rate on transfers to grandchildren and beyond.
The generation-skipping transfer tax (GST) applies to transfers that skip a generation — for example, gifts or bequests from grandparents directly to grandchildren. The GST exists to prevent families from avoiding estate tax by skipping the middle generation.
The GST tax rate is a flat 40% (matching the top estate tax rate). However, each person has a GST exemption equal to the estate tax exemption ($13.61 million in 2024). Transfers within the exemption amount are GST-free.
This calculator estimates the GST liability on transfers exceeding the exemption, helping families plan multigenerational wealth transfers efficiently.
Legal professionals, business owners, and individuals alike benefit from transparent generation-skipping tax calculations when evaluating obligations, settlements, or compliance requirements. Bookmark this page and return whenever circumstances change so you always have current figures at your fingertips.
From contract negotiations to dispute resolution, having reliable generation-skipping tax numbers at your disposal strengthens your position and streamlines decision-making. Adjust the inputs to reflect your unique circumstances and run the calculation as many times as needed to cover every plausible scenario.
From contract negotiations to dispute resolution, having reliable generation-skipping tax numbers at your disposal strengthens your position and streamlines decision-making. Adjust the inputs to reflect your unique circumstances and run the calculation as many times as needed to cover every plausible scenario.
Multigenerational wealth planning requires understanding both estate tax and GST tax implications. Proper use of the GST exemption can protect millions from the 40% tax rate. Instant recalculation as you change inputs lets you model multiple scenarios quickly, giving you the data foundation needed for well-informed legal and financial decisions.
GST Tax = (Transfer Amount − GST Exemption) × 40% 2024 GST Exemption: $13,610,000 per person Note: Estate tax may also apply in addition to GST tax
Result: $2,556,000 GST tax
Transfer of $20,000,000 to grandchildren minus $13,610,000 GST exemption = $6,390,000 taxable. GST tax: $6,390,000 × 40% = $2,556,000.
Direct skip: transfer directly to a skip person. Taxable distribution: distribution from a trust to a skip person. Taxable termination: trust assets pass to skip persons when the trust terminates. Each type has different timing and payment responsibility for the GST tax.
Key strategies include: using both spouses' exemptions, allocating exemption to trusts expected to grow most, making direct tuition and medical payments, using Crummey trusts for annual exclusion gifts, and establishing dynasty trusts in states with no rule against perpetuities.
The Tax Cuts and Jobs Act doubled the GST exemption. If Congress does not extend this provision, the exemption may drop to roughly $7 million in 2026. Families with significant wealth should consider using their exemption before the potential reduction.
A skip person is a person two or more generations below the transferor (e.g., grandchild) or a trust where all beneficiaries are skip persons. If the middle generation (e.g., child) is deceased, a grandchild is not a skip person for GST purposes.
Yes. A transfer to a grandchild can be subject to both estate tax and GST tax. This double taxation is why the GST exemption is so important — combined rates can approach 64% without proper planning.
A dynasty trust is designed to last for many generations, sheltering assets from estate and GST tax at each generational transfer. The trust pays income to beneficiaries but keeps principal protected. Some states allow perpetual trusts.
Yes, several methods exist: use your GST exemption, make annual exclusion gifts ($18,000 per person in 2024), pay tuition directly to educational institutions, or pay medical expenses directly to providers. These methods legally avoid GST tax.
Unused GST exemption is not portable between spouses (unlike the estate tax exemption in some cases). Each spouse must affirmatively allocate their own GST exemption. Unused exemption is lost at death.
GST exemption can be allocated on gift tax returns (Form 709) for lifetime transfers or automatically at death. Strategic allocation to trusts with the greatest growth potential maximizes the exemption's effectiveness.