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Millhorn Elder Law Planning Group
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What is a Dynasty Trust?


If you conducted a survey amongst your friends and colleagues, you might be surprised to learn that many of them have not spent much time contemplating their long-term planning needs. Many people die without leaving a will or advanced directive, let alone a trust. Still, probate can be a major hassle for loved ones and beneficiaries after the deceased passes on. And, if someone has considerable assets, real property, a small business or other valuable items they want to prevent from entering probate, it would behoove them to consider contacting a trusts and estates attorney to learn about their options. One option to consider for families with substantial assets they wish to pass on to future generations is called a dynasty trust.

Creating a Dynasty Trust

What distinguishes a dynasty trust from a living trust? Why is it referred to as a dynasty trust anyway; is it only for sports legends? Dynasty trusts are not reserved for the elite or sports champions. In fact, constructing a dynasty trust is a useful and practical tool to ensure you provide for your children, grandchildren and great-grandchildren long after you are gone. Unlike a living revocable trust, which can be amended at any time and only governs the distribution of assets to named beneficiaries in the revocable trust, a dynasty trust continues to provide for direct descendants of your family for more than three hundred sixty years and countless generations. If you built a nest egg and want to guarantee that your grandchildren, great-grandchildren, and their children’s children can still benefit from your good fortune and planning , a dynasty trust is the only method to guarantee their access to their birthright without paying transfer taxes, inheritance taxes, or subjecting the assets to creditors or outside parties.

Tax Benefits & Beneficiary Protections  

A dynasty trust must be formed while the grantor is still living and made irrevocable (no changes to be made. Any liquid assets, investments, stocks, securities or real property can be added to a trust, which is maintained and overseen by a trustee chosen by the grantor. A trustee handles administration of assets to beneficiaries and any legal paperwork or procedural issues that arise. Because of the term of a dynasty trust, usually a mechanism is added to appoint successor trustees to outlive the execution of the trust. Usually a substitute trustee is also listed in the event the first trustee cannot perform their duties. Any assets placed in the dynasty trust are not subject to estate tax, inheritance tax or transfer tax. And, even if your children divorce a spouse or declare bankruptcy, whatever distributions you previously elected to be designated to your grandchildren cannot be offered as collateral during insolvency proceedings or divided as equitable property in divorce proceedings with a daughter or son-in-law. Most importantly, as the grantor, you control how assets are distributed, when and in what amounts. If you wish that grandchildren don’t receive distributions until they are 18, 30, or 50, you can state that in the trust. If you want the trustee to make direct distributions to beneficiaries, you can elect it.

Schedule a Consultation with Attorney Millhorn Today

If you are contemplating your estate plans and end-of-life planning,  but are concerned about transfer taxes or inheritance taxes, you should consult an experienced trusts and estates lawyer. Skilled estate planning attorney Eric Millhorn is the founder of Millhorn Elder Law Planning Group. His office is conveniently located in the Villages, and with years of experience practicing exclusively in elder law, he is ready to assist you with all estate administration and planning concerns. Call today to schedule a consultation.




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