Explore the tax benefits of dynasty trusts with your estate planning lawyer.
When you’re planning your estate, it’s natural to think about how your assets will benefit your children or your immediate family. But what if your planning could extend far beyond that—benefiting your grandchildren, great-grandchildren, and generations even further into the future? In Florida, dynasty trusts make that vision a reality, especially when paired with thoughtful tax strategies. Here’s what you should know about the tax advantages of dynasty trusts and why they’re such a powerful tool for long-term family wealth planning with your attorney at The Millman Law Group.
What Is a Dynasty Trust?
A dynasty trust is a long-term trust created to hold and distribute family wealth across multiple generations. In Florida, these trusts can last up to 1000 years—far longer than in most other states. That means your assets can remain protected and under the terms you set for centuries, not just decades.
Despite their long duration, dynasty trusts don’t need to last hundreds of years. They are ideal for any situation where you want your assets to benefit more than just your children. For example, you may use these trusts if you’re interested in helping your grandchildren pay for college, or want to provide for family members with special needs for the long term.
Why Dynasty Trusts Offer Exceptional Tax Advantages
The core tax benefit of a dynasty trust lies in its ability to avoid multiple rounds of estate tax. Normally, when someone inherits assets, those assets may be subject to estate taxes when passed on again. But with a properly structured dynasty trust, assets remain in the trust and are not part of any beneficiary’s taxable estate.
Additionally, because assets can stay in the trust rather than being distributed outright, they’re not exposed to gift taxes or GST taxes with each generational transfer. This allows wealth to grow and compound, largely shielded from taxation.
Here’s where Florida truly shines:
- No state income tax: This means the trust’s income won’t be eroded by state-level taxation.
- Extended lifespan of 1000 years: Many states limit how long a trust can last (often to 21 years after the death of the last named beneficiary alive at the time of the trust’s creation). Florida’s much longer limit means you can stretch these tax benefits across many generations.
More Flexibility Than You Might Expect
There’s a misconception that dynasty trusts are rigid or only for ultra-wealthy families. In reality, many moderately sized estates can meet the minimum asset threshold needed to make a dynasty trust worthwhile.
Florida dynasty trusts can be structured as part of a revocable living trust or even within a will. That means you can retain the flexibility to revise the trust during your lifetime. You can also grant your beneficiaries a power of appointment, allowing them to choose who will receive their share of the trust after they pass—giving your family more control without compromising asset protection.
Partnering with Professionals for Long-Term Success
A dynasty trust’s extended duration means it will likely outlast the person who created it by many decades—or even centuries. Because of this, administration is often entrusted to a law firm or financial institution that understands Florida’s trust laws in depth.
At Millman Law Group, we help you design a trust that aligns with your goals and family dynamics, and we can guide or serve the individuals or entities you select to manage it. Our goal is to protect your vision while ensuring future generations benefit from your planning.
Ready to Explore Your Options?
If you’re ready to take estate planning beyond the next generation and want to preserve your family’s wealth while minimizing tax exposure, a dynasty trust could be the right solution. Florida’s trust-friendly laws offer an ideal environment for these long-term strategies.
Contact Millman Law Group today to discuss whether a dynasty trust is right for your estate planning goals. Let us help you build a legacy that lasts.
Estate Planning Made Easy With Millman Law Group
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.