A trust is a legal arrangement that allows trustees to control assets on behalf of a trustor. Trusts are important for estate planning, as they protect the trustor’s assets and intention to distribute them after the trustor has passed. Trusts are a great way to take care of future generations, and dynasty trusts are no exception.
What is a dynasty trust?
Dynasty trusts are a type of trust that allow s the trustor to pass down assets to future generations. They can pass from parent, to child, to grandchild and beyond. The main advantage of dynasty trusts is that they can provide asset protection for future generations. Dynasty trusts are also flexible, and can be used in a variety of w ays to meet the needs of the trustor and beneficiaries. They can be funded w ith a variety of assets, including cash, stocks, bonds, and real estate.
What are the duties of the trustees?
When an individual sets up a dynasty trust, they are typically the trustee and the beneficiary of the trust. As the trustee, they are responsible for managing the assets of the trust and making sure that the beneficiaries receive their distributions according to the terms of the trust. The duties of a trustee can be complex, and it is important to ensure that you understand all of your responsibilities before taking on this role. As a beneficiary, you may have some control over how the trust is managed, but ultimately it is up to the trustee to make sure that the trust is operated in accordance with its terms. It is important to consult with an attorney or financial advisor to make sure that you understand your rights and responsibilities before accepting any benefits from a dynasty trust.
What about the trustor?
Dynasty trusts are a specific type of irrevocable trust, which means that the trustor will lose control of the named assets except for within the confines of the trust. Dynasty trusts are often created with the intention of passing assets down through generations, free from estate taxes. However, the trustor may not be able to change the beneficiaries if their circumstances change. Additionally, if the trustor wants to sell or otherwise dispose of any of the assets in the trust, they may need to obtain permission from the beneficiaries. As a result, dynasty trusts can be a helpful tool for estate planning but it is important to understand the potential draw backs before creating one. Deciding on a dynasty trust is just one part of a comprehensive estate plan. Please feel free to reach out to us at Rademacher Financial to begin the estate planning process and discuss any questions you may have about Dynasty Trusts.
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