Your San Jose Estate Planning Attorney wants you to know how you can protect your children’s inheritance from outside predators, or even from themselves. A dynasty trust, also called a protective lifetime trust, is a type of trust that allows the transfer of wealth to future generations without incurring gift or estate taxes at each transfer. This can be particularly useful for individuals who want to ultimately pass on their wealth to their grandchildren or great-grandchildren.
Dynasty trusts are designed to last for multiple generations, potentially indefinitely. These trusts can be set up so that the assets in the trust are protected from estate taxes and other creditors, allowing the wealth to be preserved and passed on to future generations. The Dynasty Trust that you establish for your child will protect their inheritance from divorce, lawsuits, creditors, bankruptcy, and the IRS. It also ensures that the inheritance will pass to your grandchildren when your child passes away, free of tax. This means that the estate you built will stay in your family and provide for multiple generations.
The Dynasty Trust also allows you to protect your child from themself, if needed. Some children are not in a position where they have the ability to manage their own inheritance. Using the Dynasty Trust, you are able to name someone else to manage the inheritance for your child if necessary. This allows them to still receive the inheritance, and have it used for their benefit, but prevents them from using it improperly.
It is important to note that Dynasty Trusts can be complex and may come with certain restrictions. It’s also worth noting that state laws governing trusts can vary, so it’s important to seek the advice of a qualified attorney or financial advisor before setting up a Dynasty Trust.
In conclusion, Dynasty Trusts can be a useful tool for individuals who want to pass on their wealth to future generations with increased protection. To get started on yours today, call our San Jose Estate Planning Attorneys at (800) 244-8814.