A Dynasty Trust is a trust that lasts for as long as state law allows. Under Nevada law, a Dynasty Trust can last up to 365 years. A well-drafted Dynasty Trust is an effective tool to transfer wealth to multiple generations, while protecting the assets from creditors, divorcing spouses, and transfer taxes, and allowing income tax planning opportunities.
Dynasty Trusts are incorporated into an estate plan in many different ways. Dynasty Trust provisions can be built into a basic Revocable Living Trust ("RLT"). Dynasty Trusts can further be used to leverage millions out of the transfer tax system.
Dynasty Trusts can also be designed in different ways for both income tax and asset protection purposes. For example, an irrevocable Dynasty Trust can be created for the benefit of your descendants, or can be created for the benefit of your spouse and descendants (as a Spousal Lifetime Access Trust “SLAT”). A Dynasty Trust can be structured as an Intentionally Defective Grantor Trust (“IDGT”) taxed to the creator of the trust, as a Beneficiary Defective Trust (“BDT”) taxed to the beneficiary of the trust, or can be its own taxpayer for federal and state income tax purposes (“Non-Grantor Trust”).
For more information about Dynasty Trusts and how they may work with your estate plan, please contact us.