What are the benefits of a dynasty trust?

Families can avoid being subject to gift tax, estate tax, and generation-skipping transfer tax as long as the assets remain in the trust. The key difference between a dynasty trust and a traditional trust is time. With a dynasty trust, you can in theory pass down wealth for an unlimited amount of time. What is the Main Benefit of a Dynasty Trust?

What if dynasty trusts were established in 2017?

If they had established their two dynasty trusts in 2017, only $10.98 million of their $18 million estate (or $5.49 million out of each $9 million trust) would have been protected from estate tax. In other words, $3.51 million designated for each trust would have been exposed to transfer taxes.

Should you fund a dynasty trust?

Under the current tax law, using dynasty or legacy trusts means the estate would only face those taxes once and can thus grow much faster over time. Funding the dynasty trust in the next few years also takes advantage of the much higher tax exemptions allowed by the Tax Cuts and Jobs Act.