What is a Dynasty Trust?
A “Dynasty Trust” is a Trust designed to hold and protect property over multiple generations. Such trusts take advantage of jurisdictions that have abolished laws that require termination such as the Rule Against Perpetuities. They also take advantage of tax rules to minimize or eliminate multi-generation estate taxes. Because such Trusts are designed to last a long time, they will utilize advanced planning tools such as Trust Protectors, jurisdiction independence, mandatory alternative dispute resolution, spend thrift clauses, statements of wishes, and succession provisions to grow the wealth over time. A Dynasty Trust can help reduce the risk of harmful consequences from inherited wealth by capping consumption and encouraging self reliance and productivity. Both a Revocable Trust and an Irrevocable Trust may have Dynasty Provisions. A Dynasty Trust is part of the best designed estate plans, but not the entire plan. An Asset Protection Trust may or may not be a Dynasty Trust.
Dynasty Trusts vs. The Alternatives
Most Trusts and related estate planning focus on what happens to property at the time the property owner dies. Avoiding probate and transferring property to the next generation are the first and most obvious issues. But if the planning ends there, we leave both the property and the people at risk. Avoiding probate is of little benefit if the money is lost through family conflict, family fights, self indulgence, or other destructive behaviors. Dynasty planning and Dynasty Trusts involve creating structures that will provide protection that outlives any one generation.
Should I Upgrade?
There are many ways an ordinary or obsolete Irrevocable Trust can be updated or upgraded to a Dynasty Irrevocable Trust. Find out how.
What To Do?
Learning about Dynasty Trust is a good first step. Knowledge alone will not give you the benefits of actually having a Dynasty Trust. At Durfee Law Group we have been helping out clients design, implement and operate Dynasty Trusts for decades. We provide complimentary Trust reviews to determine if your Trust has Dynasty Provisions or if an upgrade is possible or appropriate. If you have questions or would like to explore your options, let us know @ 480.324.8000.