The greatest potential for accumulation of private wealth includes multi-generational planning in the form of a Dynasty Trust. As the name “Dynasty” suggests, this particular type of trust allows individuals to preserve significant wealth for multiple generations of descendants. Assets transferred into a properly structured Dynasty Trust can escape the Federal Transfer Taxes (during life) and Estate Taxes (at death) for future generations and possibly in perpetuity for as long as you have lineal descendants. Generally, these multi-generation skipping trusts are best suited for high-net-worth individuals, those with family heirloom assets, and individuals who desire to keep assets within their family for more than one generation.
However, there are two misconceptions:
- that the grantor loses control of the assets. Operational and managerial control can be retained and handed over in varying degrees;
- these trusts are just for the super-wealthy. They can be the centerpiece of basic wealth planning even for families at or below the estate tax exemptions.
They also protect assets from spendthrift beneficiaries, spousal divorce claims, and unforeseen creditors. We have successfully guided families to create very dynamic and forward-reaching Dynasty Trusts with long-term economic benefits that can hardly be denied. Regardless of the changes Congress might make to our Federal Transfer Tax laws, how “permanent” is anything when dealing with Washington? If you would like to learn more about multi-generational planning request our report on Dynasty Trusts. There is no better time than now!