Generation-Skipping Transfer Tax (GST)
The GST tax is a federal 40% tax on transfers to beneficiaries two or more generations below the transferor. It prevents families from avoiding estate tax by skipping generations. Each person has a $13.61M GST exemption (2024).
Triggering Transfers
- Direct skips: Gifts directly to grandchildren
- Taxable terminations: Non-skip interest ends, leaving only skip beneficiaries
- Taxable distributions: Trust distributions to skip persons
Florida Estate Planning Impact
- GST exemption must be allocated carefully to trusts
- Dynasty trusts (up to 360 years under FL Trust Code)
- Coordinate with estate tax exemption ($27.22M per couple)
- Affects ILIT and irrevocable trust design
- Florida has no separate state GST tax
Exemption
$13.61M per person (2024). Proper allocation can shelter transfers from the 40% tax. Married couples can combine exemptions for $27.22M.
Related Terms
- Estate Planning — GST in trust planning
- Equity — Property value subject to GST
- Evidence of Title — Trust-held property title
Barnes Walker Estate Planning
Barnes Walker's attorneys design GST-efficient estate plans for Florida families, maximizing exemptions and minimizing transfer taxes. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 201
Imposes a documentary stamp tax on deeds, mortgages, and other documents that transfer an interest in Florida real property. The rate is $0.70 per
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC