There are many types of trusts, but if you want an arrangement that’s built to last a long time and serve as many generations as possible, you probably want to look into the dynasty trust. A Rockland County estate planning lawyer can help you figure out if one is the right fit for you and your family.

When is a Dynasty Trust Worthwhile?

A dynasty trust can be worthwhile for anyone who wants to preserve wealth for multiple generations. This kind of trust can last for a long time and continue to pay out to beneficiaries like your grandchildren and great-grandchildren when properly watched over.

You can fund your dynasty trust with all types of assets. Cash, personal property, investments, and real estate can all be passed on to your loved ones in this way.

Who Pays Taxes With a Dynasty Trust?

The beneficiaries do not have to worry about taxes when they inherit from a dynasty trust. Instead, the grantor of the trust would have to pay tax when assets are transferred to the trust.

Here’s the thing though. If you transfer assets that don’t produce taxable income, like tax-free municipal bonds or stocks that don’t pay out dividends, you won’t be taxed for funding your trust. On top of that, because this is an irrevocable trust the grantor and beneficiaries do not control it. This means that the assets in the dynasty trust do not count toward anyone’s taxable estate.

How Long Can This Kind of Trust Last?

Every state has its own rules about how long assets can be passed on in this fashion though. Unfortunately, New York does not allow this arrangement to last forever. The dynasty trust can last up to 21 years after the death of the last beneficiary alive when it was established. This can still be quite a long time though.

Let’s say you established a dynasty trust when you had your first great-grandchild. It would last until 21 years after the day that they passed away. This could mean that it stays in place for close to a century! That can allow you to pass on a significant amount of money to your loved ones without anyone having to worry about huge tax bills.

Do I Need an Estate Planning Lawyer?

We do recommend talking to an estate planning lawyer if this is something you plan to do with your assets. You want to make sure that everything is done right when you are dealing with an estate that could be passed on for multiple generations. Our estate planning lawyers can handle the paperwork and make it easier for you to leave something behind for your loved ones.

Contact Our Law Firm Today

If you are ready to set up a trust and make an estate plan of your own, contact the Lauterbach Law Firm. Sit down with our team and tell us more about your priorities, and we’ll help you make a comprehensive plan that protects your assets and your beneficiaries.