Dynasty Trust
A dynasty trust is an irrevocable trust designed to last multiple generations (perpetually in some states), sheltering assets from estate, gift, and GST taxes across generations.
Exam Tip
Dynasty trust = multi-generational wealth transfer. Uses GST exemption. State law matters - some allow perpetual. Assets protected from creditors/divorce.
What is a Dynasty Trust?
A dynasty trust transfers wealth across multiple generations while avoiding estate and GST taxes at each generational level.
Dynasty Trust Benefits
| Benefit | Details |
|---|---|
| GST Exemption (2025) | $13.99M per person |
| GST Exemption (2026) | $15M per person |
| Estate Tax per Generation | $0 if properly structured |
State Duration Limits
| State | Duration |
|---|---|
| South Dakota | Perpetual |
| Alaska/Delaware | Perpetual |
| Nevada | 365 years |
| California | 90 years |
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Flashcards on MometrixRelated Terms
Generation-Skipping Transfer Tax (GSTT)
The GSTT is a 40% federal tax on transfers to persons two or more generations below the transferor, designed to prevent families from avoiding estate taxes by skipping generations.
Irrevocable Trust
An irrevocable trust is a legal arrangement where the grantor permanently transfers assets out of their estate into a trust that generally cannot be modified, amended, or terminated, providing potential estate tax benefits and asset protection.
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