Overview
A dynasty trust is an irrevocable trust designed to preserve wealth across multiple generations — potentially in perpetuity. Assets are transferred once and estate taxes are paid only at funding. Every future generation benefits from the trust without the assets ever being subject to estate tax, creditors, lawsuits, or divorces again. This is how wealthy families build and maintain multigenerational wealth.
Best For
- Families committed to multigenerational wealth building
- High net worth individuals wanting to maximize GST exemption
- Those who want assets protected from estate tax at every generation
- Families wanting to instill financial education and values in heirs
Key Features
- ✓ Perpetual duration (in states that allow it)
- ✓ Estate tax paid only once — at initial funding
- ✓ GST exemption shields all future generations
- ✓ Bloodline protection built in
- ✓ Spendthrift and creditor protection at every level
- ✓ Divorce protection for all beneficiaries
- ✓ Trust Protector for long-term flexibility
- ✓ Family governance and education provisions
- ✓ Incentive-based distribution options
📊 Tax Benefits
- ✓ GST exemption allocated at funding — zero inclusion ratio
- ✓ No estate tax at any future generational transfer
- ✓ Grantor trust status allows tax-free growth during grantor's life
- ✓ All future appreciation excluded from every beneficiary's estate
- ✓ No beneficiary has taxable power of appointment
- ✓ Can be combined with other strategies (SLAT, GRAT) for maximum impact
Considerations
- Irrevocable — cannot be taken back once funded
- State law varies on trust duration (some allow perpetual, some cap at 360-1000 years)
- Requires careful GST exemption allocation
- Trust Protector appointment strongly recommended
- Professional trustee may be needed for future generations
- Should be reviewed by estate planning attorney and CPA