Dynasty Trusts

“If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it.”

- A. Lincoln

Dynasty Trusts

Dynasty Trusts offer tremendous estate tax advantages and significant asset protection for your heirs over countless generations. They offer the opportunity for your children, grandchildren and successive generations to have wealth that is protected from estate tax and creditors.

 

At Perkins and Zayed, we want to help ensure that you and your family can feel safe and secure about the protection and distribution of your assets in the future. That is why we are excited to tell you about dynasty trusts, or “legacy trusts.” Dynasty trusts are a key tool in making sure that your family assets stay in your family. A dynasty trust is a long-term trust that can ensure assets will be passed from generation to generation without being sold off or subject to certain costs, like estate taxes.

What makes dynasty trusts different from other trusts is the length of their duration. Rather than ensuring that one generation of children or people will be provided for, as trusts usually do, dynasty trusts continue to provide for multiple generations. They are special because they are treated differently by certain laws that usually curtail the duration of trusts. This is why they are also known as perpetual trusts.

 

Who Benefits from Dynasty Trust Planning

It’s hard to overestimate the number of people who will benefit from your careful estate plan that utilizes a dynasty trust. Dynasty trusts offer tremendous estate tax advantages and significant asset protection for your heirs over countless generations. They offer the opportunity for your children, grandchildren and successive generations to have wealth that is protected from estate tax and creditors.

Here’s exactly how a dynasty trust works:

  1. After you pass, the dynasty trust supports your child’s health, education, and overall care.

  2. After your child passes, dynasty trust assets move to individual trusts for each of your child’s children.

  3. After your grandchildren pass, dynasty trusts assets move to individual trusts for each of your grandchildren’s children.

Each successive generation repeats this pattern, subject only to the limits of state law on trust duration. In this way, dynasty trusts become descendants’ trust, caring for your family far down the line after you pass. By setting up a dynasty trust, you are protecting your heirs for potentially over one hundred years.

First Steps: Providing for Your Family's Future with a Long-Term Trust

Dynasty trusts are complex and technical in their nature and need to be carefully drafted and constructed depending on your individual situation. Fortunately, that’s what our team is here for. We can walk you through all of the steps and help create a legacy trust that will serve your family both in the nearer future and far down the line, branching off to become your descendants’ trusts.

The positive outcomes from using a dynasty trust are easy to see using simple math. Setting up a long-term trust can have exponential results. For example:

  • With a dynasty trust in place, based on a 5% growth rate, $3,500,000 would grow to be over $282 million in the 90 years it would take to pass through 3 generations, assuming 30 years between generations.

  • Without a dynasty trust and using the same 5% growth rate, $3,500,000 would grow to be about $101 million at the end of 90 years as each generation is taxed at the 40% estate tax level.

The difference between using and not using a dynasty trust in this model is literally $181 million!

Don’t delay in making sure that you set up your assets to reap these extraordinary benefits in the future. Contact our legal team to set up your consultation today at 630-665-2300 or admin@trust-lawgroup.com. We are looking forward to getting to know you and your specific circumstances so that we can help you protect your family’s assets for generations.