FAQs: What’s A Dynasty Trust?

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FAQs what's a dynasty trust | estate and probate legal group

To protect generational wealth, many families use trusts to transfer assets to younger members of their family. A dynasty trust allows people to transfer wealth from generation to generation without transfer taxation such as gift, estate or generation-skipping transfer tax. A dynasty trust, also known as a perpetual trust, is an irrevocable trust with no specified termination date, and the trust lasts as long as there are assets in the trust.

5 Benefits Of a Dynasty Trust

1. Trust assets are not taxed when the trust beneficiaries die.
A Dynasty Trust lets you transfer assets from generation to generation without any transfer and estate taxes. Trust assets are not part of the beneficiary’s estate.

2. Avoid double estate taxation.
The trust assets remain in the trust – not in your beneficiaries’ estates.

3. Protect assets from bankruptcy and divorce.
If a child or grandchild who is the beneficiary of the Dynast Trust files for divorce or declares bankruptcy, the assets held in the Dynasty Trust are not accessible to the child’s spouse or creditors.

4. There is no expiration date.
Dynasty Trusts do not expire, and beneficiaries can retain the trust benefits for up to 360 years.

5. The trust grantor determines how the wealth is managed.
The grantor can dictate how their wealth will be invested, managed and distributed to beneficiaries including clauses establishing criteria beneficiaries must meet in order to receive distributions. This applies to individuals and entities such as a charity or school. 

Family business owners are good candidates for Dynasty Trust planning to preserve and protect their assets for future generations. An experienced trusts lawyer can help you determine whether a Dynasty Trust is your best option to preserve generational wealth.

DuPage County Will and Trusts Lawyers

An estate planning attorney can help you determine whether a Dynasty Trust is a good option to protect your assets for future generations. Contact the Estate and Probate Legal Group to discuss the best estate planning strategies for your situation. Call today at 630-864-5835.

AREAS WE SERVE: Cook, DuPage, Kane, Lake and Will counties.