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Dynasty trusts can protect family assets for centuries to come

We all know at least one; the control freak, every minute of every day planned morning to midnight. And not just his own, but, if he had it his way, everyone he comes into contact with. You’d think he’ll even want to control things from beyond the grave.

If he lives in Nevada, he’s in the right place. While he can’t control everything forever, he can control what happens to his estate for 365 years. Yes, not days. Years.

The estate planning vehicle that accomplishes this goal is called a dynasty trust. And if that conjures up images of an ‘80s campy drama, that isn’t totally inaccurate. While dynasty trusts are not limited to the wealthy, they have features that can protect and add value to the assets of an estate for centuries.

So why would you want a dynasty trust? And what do they do that is so special in the estate planning arena?

First, there are tax advantages. Second, assets can be kept in the family without being vulnerable to outside interests, with protection from creditors, court judgments, and even ex-spouses who may try to claim an interest in a divorce settlement. Third, assets can stay in the trust “in perpetuity,” i.e., forever, without requiring distributions, which depending on the situation at the time, could cause adverse consequences to the person receiving the distribution. Examples include the creditor access mentioned above and a distribution of money to a person with a “spending” problem, which could ordinarily be addressed in another option called a spendthrift trust.

As with any estate plan, dynasty trusts are not the best option for everyone. Some people don’t necessarily need the protection they provide due to the value or nature of their assets. Some people, unlike our control freak, are not concerned with what happens to their assets after they die. And other types of plans may just make more sense for other families.

If a dynasty trust sounds like it would fit your family’s long-term needs, or if you’d like to explore other trust planning options, it is never too soon to do it. An experienced Nevada estate planning attorney can give you advice that will best fit your requirements.

Source: Forbes, “Nevada Dynasty Trusts Strike Gold In Perpetuities in Bullion Monarch,” Jay Adkisson, Apr. 24, 2015

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