Own Luxury Homes®
Generation-Skipping Transfer Tax (GSTT) and Real Estate
Generation-skipping transfer tax (GSTT): 40% federal tax on transfers to grandchildren. $13.61M GSTT exemption per person, same as estate tax exemption. Dynasty trust allocates GSTT exemption once — all future generations tax-free. Own Luxury Homes® 12-Point Agent Integrity Audit™.
Home — Generational Wealth — Generation-Skipping Transfer Tax (GSTT) and Real Estate
Generation-Skipping Transfer Tax (GSTT) and Real Estate
Generational wealth and estate planning strategies involve complex tax law that changes frequently. All strategies require a qualified estate planning attorney and CPA before implementation. This guide is educational — not legal or tax advice.
Own Luxury Homes® 12-Point Agent Integrity Audit™
Every specialist introduced for generational wealth and family office real estate transactions has verified experience with trust-held property, estate planning coordination, multi-generational ownership structures, and UHNW transaction discretion.
What Is the Generation-Skipping Transfer Tax?
The generation-skipping transfer tax (GSTT) is a federal tax imposed when assets transfer to a “skip person” — a beneficiary who is two or more generations below the donor. Typically: grandchildren, great-grandchildren, or unrelated persons more than 37.5 years younger than the donor. The GSTT exists because without it, wealthy families could skip generations, transferring wealth directly from grandparents to grandchildren to avoid two rounds of estate tax. The GSTT rate: 40% — the same as the estate tax rate. Applied in addition to, or instead of, estate tax depending on the transfer.
The GSTT Exemption: $13.61 Million
Each person has a GSTT exemption equal to the estate tax exemption: approximately $13.61 million. This exemption can be allocated to transfers that skip generations, shielding them from GSTT. For married couples: $27.22 million combined GSTT exemption. The dynasty trust’s efficiency: allocate your full GSTT exemption to a dynasty trust funded with real estate. All future appreciation and all transfers within the trust to grandchildren, great-grandchildren, and beyond occur completely GSTT-free. The exemption is allocated once and protects the trust forever.
Ryan Brown, Principal Broker & CEO Own Luxury Homes®
“The GSTT is the tax most families discover they’ve been ignoring until their estate attorney brings it up at the worst possible moment. The dynasty trust is the solution — allocate the exemption once, fund the trust with real estate that will appreciate, and every dollar of future appreciation passes to grandchildren and great-grandchildren completely free of GSTT. That’s the power of the strategy. The real estate decision is inseparable from the GSTT allocation decision.”
Verified specialist for generational wealth and family office real estate — all 50 states. Request introduction ›
Generational Wealth Guides: Hub — Dynasty Trust — QPRT — Stepped-Up Basis — Family LP — Transfer to Children — Family Office Strategy
Frequently Asked Questions
What is generation-skipping transfer tax?
A 40% federal tax on transfers to grandchildren or later generations. Prevents families from avoiding two rounds of estate tax by skipping a generation.
What is the GSTT exemption?
Approximately $13.61 million per person, the same as the estate tax exemption. Allocated to dynasty trusts or direct transfers to grandchildren to shield them from GSTT.
How does a dynasty trust use the GSTT exemption?
GSTT exemption is allocated once when the trust is funded. All future appreciation and all distributions to skip persons within the trust occur completely GSTT-free.
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)