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What is a Dynasty Trust?

What is a Dynasty Trust?When it comes to estate planning, most people get overwhelmed trying to decipher the differences between each type of trust out there: revocable trusts, charitable trusts, spendthrift trusts, dynasty trusts, etc. There are so many trusts, each with their own purpose. So which makes the most sense for you and your objectives?

Before making any decisions, we must learn more about each type of trust. This week, we will examine the unique features of Dynasty Trusts.

What is a Dynasty Trust?

Do you want to build wealth for future generations and ensure they pay as little tax as possible? If so, then a Dynasty Trust may be for you.

A Dynasty Trust is intended to last for multiple generations, building wealth every step of the way. The primary objective of such a trust is to transfer the maximum amount of wealth to grandchildren, or subsequent generations, without subjecting the transfer to Congress’ generation skipping transfer (GST) tax. By allocating GST exemptions to the trust when the gift is made, one can exempt the trust property from future GST (and typically estate) taxes. Assets not subject to GST and estate taxes have the potential to grow much faster than assets taxed at each generational level.

Additional benefits of Dynasty Trusts include:

  1. Assets in Dynasty Trusts are also protected from your descendants’ creditors and former spouses.
  2. A Dynasty Trust can be used to centralize a family business or real estate holdings, ensuring wise use of the funds.
  3. Dynasty Trusts are often used as a means to pay educational expenses for future generations.

Is a Dynasty Trust right for you?

The best way to determine the right trust for your specific situation is to consult with an experienced estate planning attorney, like the ones at Offit Kurman. Estate planning is one of the most fundamental and important legal services that we provide.

If you have any questions about Estate Planning or Dynasty Trusts, please contact Offit Kurman estate planning attorney Steven Shane at 301.575.0313 or sshane@offitkurman.com. Mr. Shane provides strategic counseling to clients in need of estate administration, charitable giving, and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure.

Offit Kurman Attorneys at Law: Estates, Trusts and Elder Law Practice Group

At Offit Kurman Attorneys at Law, our trusts and estates planning attorneys are an experienced and trusted resource dedicated to helping you plan for the future and protect your assets. We tailor our asset protection planning services to meet your specific needs and objectives. Our estate planning attorneys design personalized estate plans to help you minimize the burden of gift and estate taxes while protecting assets from the threat of potential creditors.

If you have any questions about Estate Planning or our blog, “What is a Dynasty Trust?” please fill out the contact form found on OffitKurman.com to access the knowledgeable legal guidance that our experienced estate planning team of attorneys has to offer. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.

Sources:

The Weekly Scenario from Steve Shane – 7.15.13