What is a Dynasty Trust and Why Should You Consider One?

Several estate planning tools can be useful for different objectives, and it can be helpful to be familiar with the various types of trust. A Dynasty Trust is a powerful tool designed to preserve wealth across multiple generations and minimize tax exposure. Let’s discuss how a Dynasty Trust works and how our team at Parks Zeigler, PLLC, can tailor it to meet your estate planning goals.

What is a Dynasty Trust?

A Dynasty Trust is a type of irrevocable trust in which the grantor of the trust will appoint a trustee who will manage the assets for the purpose stated by the grantor and for the benefit of beneficiaries designated by the grantor. The thing that distinguishes a Dynasty Trust is that it can last through generations as an exception to the traditional rule against perpetuities, which limits how long a testamentary document can be enforceable. Dynasty Trusts give the grantor a unique opportunity to create a detailed plan for his or her family’s future generations, including those not born yet, with peace of mind that the assets will be managed according to the terms of the Trust.

Why You Should Consider a Dynasty Trust

Dynasty Trusts are most beneficial for individuals with significant wealth who want to protect that wealth for future generations. The biggest benefit to a Dynasty Trust is its ability to minimize estate transfer taxes. Assets transferred into a Dynasty Trust are subject to taxation only at the time of transfer into the trust, but once held by the trust, future growth occurs tax-free, and assets pass to beneficiaries without incurring additional taxes. Assets expected to appreciate significantly, such as stocks or real estate, are ideal for a Dynasty Trust because any growth on those assets will not be taxed when they are transferred to a beneficiary.

We Are Here To Help

Planning for the future can feel overwhelming, but you don’t have to do it alone. Whether you’re just getting started or have questions about wills, trusts, or other estate planning options, we’re here to help. Reach out today to speak with an experienced estate planning attorney. You can give us a call or simply fill out a short form to schedule your consultation—we’ll guide you every step of the way.

Dynasty Trusts are most helpful for families with substantial wealth who want to control the disbursement of that wealth for future generations. If this sounds like you, call our attorneys at Parks Zeigler, PLLC, to see if a Dynasty Trust is the right fit. We will take a comprehensive look at your assets and help you determine how a Dynasty Trust can benefit your family for years to come.