People who are going through the estate planning process in Virginia have many things to consider. One of these is where assets will go after the creator dies. This isn’t something that’s easy to determine, but it’s critical to ensure that it’s handled properly.
If you’re in this position and want to plan for the long term, you may consider establishing a trust. Dynasty trusts are one of these options, and they may be a preferred choice because they can preserve wealth across generations instead of only thinking of one generation.
How is a dynasty trust different from other trusts?
A dynasty trust can last hundreds of years because Virginia allows them to exist in perpetuity. The goal of this trust is to keep assets within the family, avoid estate taxes, shield contents from creditors and protect them from divorce.
Once you place assets in the dynasty trust, a trustee manages them in accordance with the terms of the trust. Typically, beneficiaries will receive income or distributions, but they don’t actually own the assets. That arrangement is what helps to keep the assets protected.
Who can benefit from dynasty trusts?
Dynasty trusts are usually suitable for individuals who have significant wealth that they want to pass down to build a family legacy. It’s useful for long-term asset planning that involves business interests or properties.
It’s critical to understand the purpose and function of a dynasty trust to determine if this the best option for your needs. It may be beneficial to work with someone who understands this estate planning tool and how it works with the remainder of your estate plan.