2025 GST exemption: $13.99 million per individual ($27.98 million married) Exemption was made permanent by the One Big Beautiful Bill Act and adjusts for inflation GST exemption allocation protects future trust growth from GST tax Must actively allocate exemption; automatic allocation has limited application

Dynasty Trust Benefits

Perpetual trusts lasting multiple generations where state law permits GST exemption shields entire trust from future GST taxes Assets grow tax-free for generations if properly structured Provides asset protection and control over distributions to beneficiaries

Direct skip: Transfer directly to grandchild or skip person Taxable distribution: Distribution from GST trust to skip person Taxable termination: Trust interest terminates, skip persons receive benefits Each event triggers GST tax unless exemption has been allocated

Trust Structuring Strategies

Fund dynasty trust with GST exemption to shelter future growth Use non-skip persons as initial beneficiaries to control timing Include distribution standards that favor current generation initially Consider jurisdiction selection for favorable perpetuity and tax rules

Coordinating GST Planning

GST exemption equals unified credit exemption ($13.99 million in 2025) Strategic allocation maximizes leverage of both exemptions simultaneously Permanence provides more certainty, but monitor for future legislative changes Use valuation discounts to multiply exemption effectiveness in trusts

The elevated GST exemption is now permanent; use it strategically for growth assets Allocate GST exemption strategically to highest growth potential assets Consider dynasty trusts in favorable jurisdictions for multi-generational planning Coordinate with qualified attorney and tax advisor for proper implementation This information is educational only; consult professional advisors for planning

Generation-Skipping Trusts

Curated by: Rubric Advisors

1 / 7

Understanding GST Tax

Generation-skipping transfer tax targets wealth transfers bypassing one generation (grandchildren)
Prevents wealthy families from avoiding estate taxes by skipping children
Applies to transfers more than one generation below the transferor
Tax rate equals highest federal estate tax rate (40% in 2025)

Key Takeaways

The elevated GST exemption is now permanent; use it strategically for growth assets
Allocate GST exemption strategically to highest growth potential assets
Consider dynasty trusts in favorable jurisdictions for multi-generational planning
Coordinate with qualified attorney and tax advisor for proper implementation
This information is educational only; consult professional advisors for planning

Our Approach Direct Indexing

Try Our Free Tools

Growth Visualizer Inflation Calculator

Understanding GST Tax

GST Exemption Amount

Dynasty Trust Benefits

Three GST Events

Trust Structuring Strategies

Coordinating GST Planning

Key Takeaways

Related Topics

Charitable Lead Trusts

Communicating with Heirs

Estate Planning in Retirement

Understanding GST Tax

GST Exemption Amount

Dynasty Trust Benefits

Three GST Events

Trust Structuring Strategies

Coordinating GST Planning

Key Takeaways

Related Topics

Charitable Lead Trusts

Communicating with Heirs

Estate Planning in Retirement