Most people want to pass down a little something to the people and causes they care about when they die. When you have worked hard and accumulated a significant amount of wealth, one of the most pressing questions on your mind might concern how you will transfer your wealth to the next generation and safeguard your legacy.
There are many estate planning tools you can use to transfer wealth to your heirs. One of these is known as a dynasty trust. It is a specific resource that is best suited to certain financial circumstances.
Understanding the basics of a dynasty trust
A dynasty trust is a long-term irrevocable trust. This kind of trust is designed to protect significant assets over the course of generations from death taxes and creditors. As a grantor, you’ll have the liberty to define the rules of your dynasty trust. Once these rules are set, your beneficiaries cannot change them.
When should you set up this kind of trust?
A dynasty trust can be a great tool if you want to keep specific assets within the family. For example, assets held in a dynasty trust cannot be subjected to division in the event of a beneficiary’s divorce. It can also be helpful if do not trust a beneficiary to prudently manage their inheritance. Finally, a dynasty trust can be an excellent tool if you want to pass family assets from one generation to the next without having to diminish their value due to estate taxes, since these taxes are paid only once instead of each time the assets pass down to the next generation.
Safeguarding your interests
A dynasty trust can be a vital resource if you want to pass on substantial assets to your descendants and their descendants. Seeking legal guidance and learning more about Pennsylvania trusts laws can help you safeguard your rights and interests while setting up a dynasty trust.