What is a Dynasty Trust?
A Dynasty Trust is a long-term trust designed to preserve wealth across multiple generations while minimising tax liabilities. These trusts are typically irrevocable, ensuring that the assets are legally separated from the settlor’s estate. Families often use Dynasty Trusts to establish enduring financial legacies and safeguard assets from creditors or future estate taxes, where legally permissible.
Different Types of Dynasty Trusts
Dynasty Trusts can be structured in various ways to accommodate a family’s unique needs and jurisdictional considerations:
1. Traditional Dynasty Trusts: Established in jurisdictions where perpetual trusts are allowed, these are designed to last indefinitely.
2. Generation-Skipping Dynasty Trusts: Utilise generation-skipping tax exemptions to transfer wealth while bypassing intermediate taxation.
3.Directed Dynasty Trusts: Include specific instructions for trustees or allow a family-appointed protector to oversee governance.
4. Discretionary Dynasty Trusts: Provide trustees with the flexibility to make distributions based on the needs of the beneficiaries.
Each type of Dynasty Trust offers a distinct blend of control, tax efficiency, and asset protection tailored to family objectives.