As the head of your family, you may take planning for the future very seriously. After all, doing what you can to help care for your assets and beneficiaries even after your passing is critical. However, if you want to ensure your wealth is passed down for generations, understanding your legal options is imperative. One choice you may want to consider is creating a dynasty trust. If you’re unsure what this is or why you should start planning now, you’ll want to keep reading and connect with our PA trust attorneys to explore this option in further detail.
What is a dynasty trust, and how does it work?
A dynasty trust, as the name suggests, is a trust fund intended to pass down the wealth you’ve earned for generations after your passing. The main benefit of this trust fund, aside from passing down wealth is that, when established correctly, there are no taxes on these transfers.
It’s important to understand that dynasty trusts are irrevocable, meaning you cannot change the terms and conditions of the trust fund once it’s established. Additionally, you will lose control of the assets placed in the fund, as they are now considered property of the trust. Though you will lose control of these assets, one additional benefit of creating a dynasty trust is that the assets held in the fund are protected from creditors.
Pennsylvania is one of a handful of states that does not impose limits on how long this kind of trust fund can last, meaning it can be continued for generations.
Do I need an attorney to establish one?
If you are interested in establishing a dynasty trust, it’s imperative to understand that you should meet with an attorney as soon as possible to discuss your options. The maximum contribution limit, which has been steadily rising as it is adjusted for inflation each year, is set to reset in 2026. That means the limit will be slashed nearly in half, lowering drastically to 6.8 million dollars, effective January 1, 2026. As such, the sooner you can meet with an attorney to explore your legal options, the better.
In addition to helping determine if this kind of trust is right for you, you can discuss the issue of trustees with your attorney. You must choose someone to manage and oversee the trust, but considering it can last hundreds of years, making this decision can be difficult. Your attorney can explore the benefits of appointing a bank or financial institution to manage the trust on your behalf.
If you are ready to create a dynasty trust, it’s imperative to understand that connecting with an attorney is the most important thing you can do during these times. At Friedman Schuman Layser, we understand how difficult these issues can be, which is why our fir will do everything possible to assist you in creating a dynasty trust that works for your unique needs. Contact us today to learn how we can assist you in these complicated times to help you achieve peace of mind for the future.