3 reasons to consider a dynasty trust in your succession plan

On Behalf of | Nov 11, 2021 | Uncategorized |

Gifting your assets to a trust is a better way of transferring wealth than giving it outright to your beneficiaries. With a dynasty trust, your family wealth is likely to benefit generations down the line, and it can be a useful estate planning tool for multigenerational families.

It is essential to consider the pros and cons of any wealth transfer strategy before deciding on the one to go with. Below are some reasons to consider a dynasty trust over other options.

It will protect family assets

A well-drafted dynasty trust includes provisions that protect trust assets from creditors. Since the ownership of the assets is transferred to the trust, creditors cannot attach such property to recover a debt. It also protects such property from a lawsuit or divorce.

The tax savings in the future could be significant

Exemption from estate tax is just one of the benefits of creating a dynasty trust. Future tax savings could also be considerable since any appreciation of assets is no longer included in the grantor’s gross estate when it comes to federal estate tax dues. In addition, some states do not have capital gains tax, and proceeds from the sale of assets under a dynasty trust are only taxed at the federal level.

Family wealth can benefit generations down the line

A dynasty trust allows grantors to distribute wealth to future generations. They can last for hundreds of years, which means that your lineage will benefit from the trust even a century from now.

Is a dynasty trust right for you?

It all depends on your end objectives. Your succession plans should reflect your wishes and ensure that your beneficiaries get the most of your estate. Therefore, it is necessary to proceed with the correct information to avoid issues when handing down your assets.

Beverly Hills Bar Association
Super Lawyers
The State Bar of California
Los Angeles County Bar Association
American Bar Association