People who are setting up an estate plan have to determine how to get their beneficiaries the assets they want them to have. Some people use wills, but these have to go through the probate process and can be challenged.
Another option is to use a trust to pass the assets down to the beneficiaries. There are many types of trusts that people can choose from. Deciding which one is the best option depends on the purpose of the trusts and the circumstances related to the estate. One option is a dynasty trust.
Long-term dynasty trusts
A dynasty trust is a long-term estate planning tool designed to preserve wealth across multiple generations. Unlike standard trusts, which typically end after a certain number of years or upon the death of beneficiaries, a dynasty trust can last up to 1,000 years in Florida.
Benefits of a dynasty trust
The primary advantage of a dynasty trust is that it can help avoid estate, gift and generation-skipping transfer (GST) taxes at each generational level. Using this type of trust enables the assets to remain in the trust. Since they aren’t transferred to the beneficiaries, the overall tax liability can be reduced.
Since the trust technically owns the assets, those assets are protected from creditors and settlements. This ensures that the assets and income from them are available for the beneficiaries. The terms of the trust are set by the creator and can outline exactly how everything will be distributed.
Dynasty trusts in Florida can be a valuable estate planning tool, but they must be set up properly. Working with someone familiar with these matters may be beneficial.