Estate Planning Law

What is a Dynasty Trust?

If you plan on transferring your wealth to the next generation in your family, you may want to make a gift to the younger members of your family in a trust instead of gifting your assets outright. 

By utilizing the method of gifting your assets to a trust, you can enjoy many advantages such as tax planning, asset protection, and control over your assets.  In this article, we are going to talk about a specific kind of trust – a dynasty trust. 

If you have additional questions, we welcome you to call us at Doane & Doane, PA.  At Doane & Doane, PA, we are passionate about giving our clients the personalized legal counsel they need to appropriately take care of many major life and death decisions, including Florida estate planning.

So, to answer your estate planning questions, we welcome you to consider contacting us at Doane & Doane, PA for estate planning advice and services.  You can contact us today at 561-656-0200 or fill out our online contact form.

What is a Dynasty Trust?

A dynasty trust includes any trust that lasts longer than just one generation. However, in Florida dynasty trusts are a form of irrevocable trusts that are designed to last for up to 15 generations or approximately 360 years. All the assets transferred into your Florida dynasty trust automatically are sheltered from a wealth transfer tax as long as your trust is in existence. 

There are many benefits to a dynasty trust including the fact that your trust assets are protected from your beneficiaries’ creditors.  When structuring your dynasty trust, there are a few options that can be a benefit to you and future generations. 

A Dynasty Trust Removes Your Assets from the Transfer Tax System

One of the main benefits of a Florida dynasty trust is that when you transfer your assets to the trust during your lifetime, your assets are then sheltered from future wealth transfer taxes.  

There are currently three different types of transfer taxes. They include:

1. Estate Taxes
2. Gift Taxes
3. Generation-Skipping Transfer Taxes

The trustee of your dynasty trust has the power to use the funds in your trust to pay for the education, health care, support, and maintenance of your beneficiaries.  

Your trustee could also choose to use the funds in your Florida dynasty trust to pay for residential, travel, and vacation properties for the enjoyment and use of your beneficiaries. 

Asset Protection for your Beneficiaries in a Dynasty Trust

If one of your beneficiaries would like to purchase a new residence or vacation home, the trustee can use the funds in your Florida Dynasty Trust to purchase these assets on behalf of the beneficiary. Simply put, the trustee and not your beneficiary would own this investment for use by your beneficiary.  

As part of your Florida estate planning, you can establish a provision in your dynasty trust that prohibits your trustee from distributing your assets to or for the benefit of your beneficiaries’ creditors.   

This is possible because the trustee, not the beneficiary controls the trust investments, and because the dynasty trust would contain such a spendthrift provision, the creditors of your beneficiaries cannot touch the trust assets to satisfy a debit or judgment. 

Dynasty Trusts are Flexible 

As part of your Florida estate planning, your dynasty trust can be prepared to allow them to easily adapt and react to any changes in the law. The Florida estate planning professionals at Doane & Doane understand dynasty trusts, and can draft a trust in such a way that it fits your needs. 

A Florida dynasty trust can easily fit into your current estate plan. If your estate includes stock in a closely held or family business, using a dynasty trust combined with a tax-free annual gifting and low-interest installment sales, you can reduce or eliminate the wealth transfer tax your beneficiaries would have to pay otherwise. 

When Can My Florida Dynasty Trust Be Created? 

We can create your dynasty trust during your life or upon your death. If you have enough core capital to support your current lifestyle through your life expectancy, you may be a candidate to use your transfer tax exemptions during your lifetime. 

A Dynasty Trust and Your Florida Estate Plan

When deciding on whether to have a will vs. a trust as the main part of your Florida estate plan, you may want to consider whether any of the factors in this article apply to you.

While it is always important for your Florida estate planning attorney to make recommendations, their main job is to give you the information required so you can make the most informed decision based upon your unique Florida estate planning goals. 

Look to Doane & Doane for Help with Estate Planning Options

Founded in 2003 by husband and wife legal team, Randell C. Doane and Rebecca G. Doane, Doane & Doane provides legal and financial services to families, individuals, and businesses throughout Southeast Florida.

Estate planning is about much more than just giving away property.  It is an act of love and kindness, with the ultimate goal of providing for the future financial security of your loved one.  At Doane & Doane, our Wills and Trusts Attorneys West Palm Beach help people plan for retirement, make provisions for loved ones, figure out future child support, and minimize tax liability.  Experienced wills and trusts attorneys know which tools to use to get the best results for their clients.  Our lawyers can help you determine which tools are best suited to your specific circumstances.

When it comes to probate matters, such as the formal administration of an estate, Florida fiduciaries seek the assistance of the attorneys at Doane & Doane, P.A. to administer and manage their trusts and estates.  Notably, the founding partners of Doane & Doane are board-certified West Palm Beach Probate Attorneys.  With the additional advantage of certified public accountancy in their backgrounds, they present a unique combination of skills and experience which enables them to effectively settle, administer, and manage clients’ trusts and estates.

Call us at Doane & Doane, P.A., to help you if you are faced with a probate matter, or if you would like estate planning services in Florida.  You can reach us at 561-656-0200.  Call us today.

The information in this blog post is provided for informational purposes only and is not intended to be legal advice. You should not decide whether or not to contact an attorney based upon the information in this blog post. No attorney-client relationship is formed, nor should any such relationship be implied. If you require legal advice, please consult with an attorney licensed to practice in your jurisdiction.