Dynasty Trusts

What is a Dynasty Trust?

In Estate Planning, a Dynasty Trust is an Irrevocable Trust incorporated into a Will or Revocable Living Trust designed never to end, but instead continue perpetually providing for descendants. A Dynasty Trust may also be included within other Irrevocable Trusts, such as Irrevocable Life Insurance Trusts and Disclaimer Trusts.

What is the Purpose of a Dynasty Trust?

A Dynasty Trust shelters the trust assets over generations from death taxes as well as the beneficiaries’ divorces and creditors. A Dynasty Trust can contain Special Needs Trust language, so a recipient is not excluded from needs-based government programs. If a beneficiary cannot be trusted to manage their money, a Dynasty Trust can be designed to protect the recipient from themselves. It is an excellent device to keep assets within the family. If developed and managed correctly, a Dynasty Trust may also be a significant tool to avoid state income taxes.

Example: Father’s Will divides his assets into shares down his bloodline which, at his death, is two equal shares one for Son and one for Daughter. At Father’s death Son is being sued. If drafted correctly, the Dynasty Trust shelters the inheritance from Son’s creditors. At Father’s death Daughter is divorcing. If written correctly, the Dynasty Trust shelters the inheritance from Daughter’s spouse.

Example: Using the facts from the prior example, Son dies soon after Father survived by his three children. The Dynasty Trust divides the remaining trust assets into three equal shares, one for each of Son’s children, and the Dynasty Trust continues.

Typical Estate Questions About Dynasty Trusts:

Here are some questions clients, beneficiaries, and Trustees ask:

What is the maximum amount of time a Dynasty Trust can be open?

Each state has rules dictating how long a Dynasty Trust may last. Several states, such as Pennsylvania and New Jersey have no time limit. Dynasty Trusts can last forever in these states.

Can I set an end date for a Dynasty Trust?

Yes, For example, you can say the Dynasty Trusts end at a specified date or the death of the last grandchild.

Do new children born or adopted by descendants get added automatically to a Dynasty Trust?

You can include or exclude anyone from a Dynasty Trust.

Does a Dynasty Trust have to include only family members?

No, you can include anyone. Though, as the term indicates, most people limit beneficiaries to their descendants.

Can a charity also be a beneficiary of a Dynasty Trust?

You can incorporate a charity into a Dynasty Trust. For example, you could say that each Beneficiary’s death, 10% of the trust’s assets pass to Penn State.

Reasonable Prices | Years of Experience | We Make Trusts and Estate Planning Easier

If you have any questions about Dynasty Trusts or any other estate planning topics, please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate law and planning techniques clearly and concisely. We make it easy for you to understand Dynasty Trusts and Estate Planning so you can make the best decisions for yourself and your family.

Irrevocable Trusts

Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. We serve clients in Pennsylvania, New Jersey, New York, Minnesota and Florida. Peter Klenk received his Masters in Taxation LL.M. from NYU Law School and his J.D. from the University of Minnesota Law School. He served his country in the Navy JAGC during Desert Storm. Easy to talk to, feel free to call Peter for an appointment. We will make the process as easy as possible!

Free Consultation

Client Review

"I worked for Peter Klenk for 4 wonderful years. I can’t speak highly enough of everyone at the firm. Everyone truly cares about their clients and has a strong sense of responsibility to get things done right. I would highly recommend Klenk Law!"
Flora Novick
Client Review

Kevin K.

I was referred to Peter after my divorce to put documents together to protect my assets. He suggested a number of documents that would help protect my children and their future. Also, he put together wills, power of attorney and living wills. I initially spoke with him on the phone, he took 30-40 minutes to understand my situation and explain the benefits of having such documents. After a week or two, I met with him in his office and signed the documents. Everything else was remote phone calls and emails. He re-explained these documents and what whom to share. I am in good hands.

Chantee C.

Peter recently gave a presentation about Wills & Trusts at my employer, and it was fantastic! He was extremely knowledgeable and provided valuable information to the group. People were very engaged and asked several questions, all of which Peter thoroughly answered. Personally, my husband and I have selected Peter to help us with our estate planning, and he has been very helpful in providing us with all of the information we need to provide a secure future for our family. Thank you, Peter!

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. Please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

Dynasty Trusts: Everything You Need to Know