How the GSTT Works
The tax rate is a flat 40%, applied on top of any gift or estate tax. It can hit three types of transfers: direct skips (gifts straight to a skip person), taxable distributions from a trust to a skip person, and taxable terminations when an interest in trust ends.
The GST Exemption
Each person has a lifetime GST exemption matching the federal estate tax exemption (over $13 million per person in 2026). Married couples can shelter twice that amount. Dynasty trusts allocate exemption at funding so the entire trust grows GST-free for generations. Most Arizona families never trigger the tax, but high-net-worth planning must account for it carefully.
Arizona Drafting Backdrop
Arizona drafting must align with the scope rules in A.R.S. 14-2701 so the GST allocation is honored across generations.
For the full Arizona walkthrough of GST tax, exemption allocation, dynasty trusts, and the federal estate and gift tax framework, read our pillar guide: Estate, Gift & GST Tax in Arizona: The Complete Guide.