Heirs of Heirs of Heirs of Heirs Love Dynasty Trusts

The lucky few have money not only to pass on to their children, but to their children’s children’s children. Due to the increase of the federal gift and estate tax exemptions under the Tax Cuts and Jobs Act, dynasty trusts are looking more appealing to those that can provide for their great-grandchildren and beyond.

A dynasty trust is a trust that has no expiration date and is available in a small number of states such as Delaware and South Dakota. The estate tax exemption is only double until 2025 and then will revert back to the previous amount of $11.2 million, so donors are taking advantage of the benefits of dynasty trusts while they can. The trusts can be funded by cash, stock, or assets, and beneficiaries do not have to pay capital gains on the assets until they are sold. They may still have to pay for income tax from the proceeds.

Dynasty trusts are efficient, tax-saving tools to help future generations and to provide an amount of control over your money, even after you have passed away.

See Ben Steverman, Heirs of Heirs of Heirs of Heirs Love Dynasty Trusts, Bloomberg, June 10, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.