What comes to mind when you hear the term, estate plan? Some of you may simply see it as a way to ensure your immediate family is taken care of after you die. It can also be so much more.
By including a dynasty trust in your estate plan, you can provide not only for your immediate family, but also for generations to come. A dynasty trust is also known as a “wealth trust” or “gifting trust.” This is because it lets the creator, or donor, provide for multiple generations. In other words, he or she can make provisions for his or her children, grandchildren, and even great-grandchildren.
Dynasty trusts are irrevocable. This means, generally speaking, no one can rescind or amend them. Additionally, the donor cannot be the trustee of the trust. He or she must designate someone else for this role. This may be an individual, a bank, or trust company. The trustee’s job is to administer the trust as per the donor’s instructions.
There are many benefits of establishing a dynasty trust. For instance, there are few, if any, restrictions on the provisions a donor can include. The parameters for distribution of assets may be as broad or specific as the donor wishes. For example, some provisions may allow beneficiaries to allocate some of the trust assets as per their own wishes. If permitted, the beneficiaries may do so during their lifetimes or make arrangements for posthumous allocations.
Yet another benefit is that the beneficiaries may also be able to access the assets before the donor experiences a catastrophic illness, injury, or passes away. Additionally, a dynasty trust may be shielded from creditors, judgments and so forth. There is an important caveat, however. The extent of the protection depends on how and when the trust is created.
In addition to leaving something for future generations, setting up a dynasty trust allows you to make lasting contributions to your favorite causes or organizations. This further expands the utility of the dynasty trust.
If you are interested in learning more about dynasty trusts, give our law office a call. We are always willing to share the information you need to make an informed decision about the estate planning mechanisms that are best for you.