Life insurance or special needs trusts aren’t the only ones that exist. Dynasty trusts come into play when you want to ensure that your assets last for many generations, but you don’t want to lose a lot of money in taxes. Tax planning also goes hand in hand with dynasty trusts. If you’re a South Florida resident who wants to add a dynasty trust to your estate plan, Millman Law Group has you covered. Here is what you should know.
A Dynasty Trust Defined
Estate planning has so many aspects and nuances. For this reason, it matters that we have a working definition of a dynasty trust. A dynasty trust ensures that you can transfer wealth between generations while minimizing exposure to transfer taxes. If used for this purpose, a dynasty trust within an estate plan can be used as an irrevocable trust. Once we create the trust, the settlor or person who founds the trust can no longer control the assets held in the trust. Instead, the legal document that establishes the trust designates a trustee to manage the funds and distribute them to beneficiaries based on what the trust lays out.
Dynasty trusts are also long-term, meaning that they can last up to 360 years. Some trusts in estate planning do not last this long. A dynasty trust, of course, doesn’t have to last this long, but it all depends on how many generations you would like to benefit from it.
How Do Dynasty Trusts Work Exactly?
A dynasty trust commences when the grantor executes a declaration of the trust and transfers assets such as cash, securities, real estate into the trust. Dynasty trusts are testamentary, meaning that a will creates them. They can also exist when the grantor is still living as an irrevocable or revocable trust. The beauty of retiring in Florida is that most other states do not have Florida’s generous rule which allows Trusts to last 360 years, and other states also have state and estate taxes that take away from the trust’s value. Due to the long-term nature of a dynasty trust, it also matters that you appoint competent successor trustees.
How Does Tax Planning Play into All of This?
It’s best to use the tax code when protecting your assets for your family. There are taxes associated with transferring assets from generation to generation. We can help you avoid estate taxes, gift taxes, and generation-skipping transfer taxes. If you’re not a Florida resident and you’d like to settle down here and take advantage of these benefits, Florida domicile planning is something that you should discuss with us.
YOU CAN “TRUST” MILLMAN LAW GROUP TO ADMINISTER YOUR TRUSTS
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.