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What is a Dynasty Trust?

| Oct 12, 2020 | Estate Planning

In the Commonwealth of Pennsylvania, there are many tools you can use to create a customized estate plan. While many are commonly employed (wills, power of attorneys, and living trusts), others fly under the radar. A Dynasty Trust is a hidden gem that exists in the estate planning universe.

A dynasty trust is a long-term trust designed to pass wealth to the next generation while avoiding transfer taxes, such as federal estate tax and gift tax. As long as the assets remain in the trust and the trust is maintained and managed, these taxes should never come into play. The primary benefit of a dynasty trust is its ability to make the trust last forever.

Here are three things you need to know:

  • If you’re seeking a way to leave assets to a future generation without any concerns about federal estate taxes, a dynasty trust is often an approach
  • A dynasty trust offers asset protection from creditors, as the assets are owned by the trust, not a specific individual
  • A dynasty trust is irrevocable, meaning that the terms and conditions cannot be changed once they’re finalized, and the trust is funded so it needs to be set up correctly right from the start

Creating a dynasty trust is not your only option for passing wealth down from generation to generation, but there are specific benefits that make it appealing. Talk to one of our Pottstown estate planning attorneys or Reading estate planning attorneys today to determine if it is right for you.  What day is better than today to start planning your estate?

If you’re interested in creating or learning more about the legal process for a dynasty trust or any other estate planning to assist you and your loved ones, the attorneys at Rick Stock Law are available to assist you with your Pennsylvania Estate Planning.