Dynasty Trust

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What is a Dynasty Trust

What is 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.

Dynasty Trust

 

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Legacy Trust vs. Dynasty Trust

A legacy trust vs. a dynasty trust mean the same thing. It’s an irrevocable trust that allows wealthy families to keep their money in the family for many generations skipping transfer taxes, such as gift tax, estate tax or generation-skipping transfer tax (GSTT) for as long as assets remain in the trust.

 

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. The trustee can charge for trustee fees
  3. Give a 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 the 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.

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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.

Trust Administration Attorney

When it comes to advanced estate planning like a dynasty trust, it is advisable to work with a Trust Administration Attorney.  The reason behind this is because a Trust Administration Attorney will have had many opportunities to see what estate plan works and what Trust plan may not be sufficient for your situation.

Needing Advanced Estate Planning? – What You Should Know!

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and what to consider when working with Hess-Verdon.

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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.

Trustee Removal

Are you a Trustee or Beneficiary where protection of the Trustors wishes are being challenged and causing family disputes?

Develop strategies on preempting a Trust dispute and discover What You Need to Know About the Trustee Removal Process

Hess Verdon has a deep bench and knows both sides of the equation to remove or suspend a Trustee or to safeguard the Trustee from a frivolous legal process. Hess-Verdon top litigators will help you stay on track!

 

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Beneficiary is attacking me

Attacked by a beneficiary who objects to how you, a Trustee, or Administrator, is handling an estate?

Prevent Trustees from Making Some Common Mistakes. 

Duties | Delays | Choices | Distributions

Timing on each one is critical to avoid litigation

Hess-Verdon has over 30 years of dealing with Beneficiary and trustee disputes. Let us review your situation. You’ll be glad you did. Contact us for a No Charge, No-Obligation Consultation.

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 or Call Now

(949) 706-7300

Contesting a Trust

 Are You Considering Contesting a Trust or the most recent amendment? Was there a capacity issue or undue influence?

Be Careful when contesting a trust and know the elements it takes to protect the trust assets. Reserve your rights before Statute of limitations happen!

Hess-Verdon works hard to resolve Trust and Estate issues and preserve the estate by minimizing costly litigation. Contact us for a No Charge, No-Obligation Consultation.

 

Contact Us Green What is a Dynasty Trust or Legacy Trust?

 or Call Now

(949) 706-7300

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Jillyn Hess-Verdon

Jillyn Hess-Verdon

Managing Partner

R. Kurt Ketchum

R. Kurt Ketchum

Associate Attorney

David Crumpton

David Crumpton

Associate Attorney

Stacy L. Olsen

stacy l. Olsen

Associate Attorney