A dynasty trust carries on from one generation to the next. Unlike other irrevocable trusts, dynasty trusts are not subject to the anti-perpetuity rule that ends most trusts after some time. They last forever, as long as there are assets held in the trust.
You may consider having a dynasty trust if you have wealth that you would like to stretch to future generations.
A dynasty trust protects and preserves your family wealth
You could save your estate millions in estate taxes by establishing a dynasty trust. Having one may exclude you from some estate, generational transfer and gift taxes.
If the beneficiaries do not control the trust property, it’s not included in their taxable estate, thus reducing the possibility of double taxation. Creditors are also prohibited from seizing any property contained in the trust if they plan to use it to satisfy a beneficiary’s debt except under limited circumstances. This protects an estate from future uncertainties and guarantees a trustor’s descendants financial security.
Asset management and dynasty trusts
Like any other trust, dynasty trusts will ensure that your assets are well managed and protected from waste. This is particularly beneficial if you have young children or grandchildren who may not have the skills to manage your assets financially. In addition, professional management of your dynasty trust assets ensures that your estate will trickle down to future generations.
A lot goes into planning a dynasty trust to ensure it serves the purpose you intended for it to. But, of course, the devil is usually in the details, and it is important to protect your legal rights. Also, the law on succession is ever-changing, which means you have to anticipate and be prepared to seal any loopholes. Getting the guidance you need may be an excellent place to start.
