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    Calculates locally in your browser · GST and charitable planning
    Estate / generation-skipping

    GST and charitable estate calculator

    Leaving assets to grandchildren can trigger a second transfer tax on top of the estate tax. This calculator applies the GST rate to the unallocated part of the transfer, prices a charitable bequest against the estate tax it avoids, and shows the drag that trust administration fees impose over time.

    Exemption$13,990,000Rate40%StructureGST + CRT
    GST tax
    $2,404,000
    12.0% of the transfer
    Charitable tax saved
    $800,000
    On a $2,000,000 bequest
    Trust admin drag
    $2,415,736
    1.0% a year for 20 years
    Net to beneficiaries
    $14,510,797
    After tax, GST and fees
    Transfer tax stack
    Estate tax, GST and the cost of running the trust.
    $2,404,000
    Transfer tax stack
    LayerAmountNote
    Transfer to grandchildren$20,000,000GST applies on top of estate tax
    Exemption allocated$13,990,000Uses the lifetime GST exemption
    GST taxable$6,010,00040% flat
    GST tax$2,404,000—
    Charitable gift$2,000,000Deductible from the estate
    Estate tax saved$800,000At 40%
    Trust fees over the term$1,481,2031.0% a year

    GST and estate tax can both apply to the same transfer; the exemptions are separate.

    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    GST against transfer size
    Flat until the allocated exemption is used, then 40%.
    GST against transfer size$0$1434.5k$2869.0k$4303.5k$5738.0k$7172.5k0M0M3M3M6M6M9M9M12M12M15M15M18M18M21M21M24M24M27M27M30M30MGST
    Planning levers
    Charitable deduction against the trust cost.
    Planning levers$0$349.6k$699.1k$1048.7k$1398.3k$1747.8kCharity savesCharity savesTrust feesTrust feesAmount
    Canonical equations
    The exact relationships implemented by this engine.

    40% × max(0, transfer − allocated exemption) · Separate from the estate tax exemption.

    deduction × 40% · The gift leaves the estate before tax.

    principal × (1 + g − fee)^t · Fees compound against you.

    finance methodology

    A clear path from inputs to results.

    Leaving assets to grandchildren can trigger a second transfer tax on top of the estate tax. This calculator applies the GST rate to the unallocated part of the transfer, prices a charitable bequest against the estate tax it avoids, and shows the drag that trust administration fees impose over time.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Enter the transfer to grandchildren.
    2. Set how much GST exemption you allocate.
    3. Add a charitable bequest and the gross estate.
    4. Set the trust principal, cost and term.

    The formula

    GST=0.40×max⁡(0,T−Xallocated)GST = 0.40 \times \max(0, T - X_{allocated})

    Reference: IRC §2601 (GST tax), §2055 (charitable deduction), §2632 (allocation).

    Worked example

    $20M to grandchildren, $13.99M exemption allocated

    Inputs
    • Transfer $20,000,000.
    • Exemption allocated $13,990,000.
    • Charitable bequest $2,000,000 on a $20M estate.
    Calculation path
    1. 1

      GST taxable: 20M − 13.99M = $6.01M.

    2. 2

      GST at 40%: $2.404M.

    3. 3

      Charitable bequest saves 2M × 40% = $800k of estate tax.

    4. 4

      Trust fees at 1% a year for 20 years cost over $1M of terminal value.

    Result

    GST $2.404M · charity saves $800k · trust drag over $1M.

    Interpreting the result

    GST is the tax people forget. It applies in addition to the estate tax on the same assets when they skip a generation, and its exemption is separate — so a plan that only counts the estate tax can be short by 40% of the transfer. Charitable bequests and trust structures are the two levers that move it.

    Assumptions & limitations

    • Federal GST and estate tax only.
    • Exemption allocated at the time of transfer.
    • Charitable deduction at 40% of the gift.
    • Trust fees reduce principal annually.

    Frequently asked questions

    Does GST apply on top of estate tax?

    Yes. The two exemptions are separate, so both can apply to the same transfer.

    Do trust fees really matter?

    At 1% a year over 20 years they consume a meaningful share of the terminal value.

    What is GST allocation?

    Affirmatively assigning exemption to a transfer so it is not taxed.

    Methodology last reviewed 2026-10-21. Results are informational and not financial or engineering advice — see our disclaimer.