What is a Dynasty Trust or Legacy Trust? 2

Serving State: California, Southern California

Serving Counties: Orange County, Los Angeles County, Riverside & San Bernardino County, San Diego County

Serving cities: Newport Beach, Huntington Beach, Irvine, Costa Mesa, Laguna Beach, Newport Coast, Corona Del Mar, Santa Ana, Anaheim, San Juan Capistrano, San Clemente, Buena Park, Fullerton, Orange, Lake Forest, Laguna Hills, Garden Grove, Tustin, Yorba Linda, Fountain Valley, Westminster, Dana Point, Rancho Santa Margarita, North Tustin, Seal Beach, Los Alamitos, Villa Park, Ladera Ranch, Placentia, Laguna Woods, Aliso Viejo, Coto De Caza, State of California

Who should consider a Dynasty Trust?

What is a dynasty trust?  A dynasty trust is a special kind of trust (Irrevocable trust: Irrevocable Life Insurance Trust (ILIT)) that allows you to pass wealth to your descendants. One can consider it as a “perpetual trust” but many states have now limited the time frame.  In California its around 90 years. Also, because it’s a generational-skipping trust, it avoids some repetitive taxation. Hess-Verdon recommends speaking to an estate planning attorney to review tax changes applicable to a dynasty trust.

Get a Second Opinion Today!

Address: 620 Newport Center Drive, Newport Beach, CA. 92660
Phone: 949-706-7300

Get Started Now!

What is an ILIT?

An ILIT is an irrevocable trust that owns life insurance.  The grantor funds the insurance through annual contributions.  The difference between a dynasty trust vs any other ILIT is that a dynasty trust uses the grantor’s generation-skipping transfer tax (GSTT) exemption to continue the trust for generations. The generation-skipping transfer tax (GSTT) is a flat tax imposed on all transfers that skip a generation.

What to know about Dynasty Trusts

Affluent individuals who desire to safeguard their estate wealth and also create a lasting legacy for loved ones have many strategic and tactical estate and tax planning decisions to make. While considering a dynasty trust, consider how gift taxes, estate taxes and generation skipping transfer taxes can dramatically influence the amount of inheritance left to your children, grandchildren, and great grandchildren.

What is a Dynasty Trust or Legacy Trust? 3
What is a Dynasty Trust or Legacy Trust? 4

About Hess-Verdon & Associates: Our firm tailors each trust to address the unique situation and circumstances of each client.

What are some Dynasty trust pros and cons?

Dynasty Trust Pros and Cons:

  • Pros
  1. Prone to trust disputes.
  1. Why?  It allows the successor-trustee to have more autonomy on how to manage the trust.  
  2. Trustee can charge for trustee fees
  3. Give wide latitude of discretion for the successor-trustee in a way that beneficiaries believe in unfair.
  • Cons:
  1. Drafting a dynasty trust is very important.  Failure to do so could result in adverse tax treatment of trust proceeds.
  2. States are now limiting the life of the trust.
  3. The trust must be irrevocable.  Once assets are placed in a dynasty trust, the grantor does not have the right to revoke or amend the trust.

 

How to set up a Dynasty Trust?

  1. Consult with an attorney that has experience setting up advanced planning tools like Dynasty Trusts.
  2. Name your Trustees and Beneficiaries
  3. Decide which assets to include
  4. Determine how funds will be distributed
  5. Fund your trust

 

Hess-Verdon & Associates, A Professional Law Corp. is a full-service law firm, established in 1990. The firms founding principles, and its dedication to a proven philosophy of client-centered service has remained unchanged.

What is a Dynasty Trust or Legacy Trust? 5

Delivering high quality, client focused service

Hess-Verdon & Associates, PLC

A Professional Law Corporation

What is a Dynasty Trust or Legacy Trust? 6

Jillyn Hess-Verdon

Managing Partner

What is a Dynasty Trust or Legacy Trust? 7

Keith Van Dyke

Partner

What is a Dynasty Trust or Legacy Trust? 8

James R. Cunningham

Senior Associate - Attorney

What is a Dynasty Trust or Legacy Trust? 9

R. Kurt Ketchum

Associate Attorney

Fee Arragements Include:

  • Hourly fees, regular rates, structured rates, and custom rates to meet your particular needs.
  • Contingent Fees if the merits and nature of your case warrant.
  • Part hourly/part contingent fees.
  • Enforce provisions to make your opponent pay your fees.
  • Fixed Fees.
  • Retainers.
  • Cooperate with corporate legal department policies.
  • There is generally no charge to a new client for an initial one-hour consultation.
  • Second opinions on the handling of your case can be rendered on favorable terms, in some cases, at no charge.

We work with you to keep your fees to a minimum by designing a strategy that gets the maximum result. We work diligently to promote a favorable settlement with the least expenditure of time.

We have successfully represented a large variety of clients. The successful outcome of any given case, which is always dependent upon its specific facts, can never be guaranteed.

In some matters, when we negotiate some or all of the attorney fees on a contingency basis, the client may be held responsible for advanced costs.  

Some of the advanced costs (including, but not limited to)

  • Deposition fees, filing fees, witness fees, etc. when there is no recovery.