Delaware Dynasty Trust
Establishing a Trust that Provides a Long-Lasting Legacy
For U.S. citizens living in the other 49 states and territories of the United States who have millions of dollars of wealth they will not need during their lifetime, a Delaware Dynasty Trust is a way to provide a legacy to children, grandchildren, and beyond. For high net worth families, a Dynasty Trust can be a powerful tool in their estate planning arsenal.
This type of trust can continue for multiple generations without the need to pay estate, gift, or generation-skipping transfer taxes. You can provide a long-lasting legacy through a Delaware Dynasty Trust to provide generations of financial security and tax benefits to your family.
Wealthy families from all over the United States seek out Delaware Dynasty Trusts because Delaware’s law is more predictable and favorable than other States’ laws. The Williams Law Firm can provide you a form of Delaware Dynasty Trust to review with your local estate planning attorney where you live to determine if this is a good fit for you. To be eligible for this, you will need to be sure you do not have current or foreseeable creditors. You also will not want to put more than about one-third of your assets into a Dynasty Trust, or you may risk the trust being seen as abusive.
Delaware is a desirable jurisdiction when selecting the legal home of your trust in part because it places no limits on the duration of a trust. In other words, creating a Delaware Dynasty Trust gives you the chance to create a family legacy that could last forever. Delaware does not impose income tax on the capital gains or income from trusts if the beneficiaries do not reside in Delaware, so this is an added benefit.
Contact our Firm
Connect directly with our team by sending a message with your name and either a phone number or an email address.
When creating a Dynasty Trust, you must first decide how to fund it. You can choose to fund the trust during your lifetime or at the time of your death. Funding it during your lifetime allows your assets to grow while you are living and keeps the appreciation out of your taxable estate. If you are certain you do not need the assets for your foreseeable lifetime expenses, this allows the trust to start growing sooner without the future appreciation being included in your estate.
Next, consider the type of funds or assets you will place into your trust. Choose asset types that have the chance to grow, such as investments. Ownership in LLC interests of an LLC that holds real property in other states is not usually the best candidate because it does not have liquidity for expenses and distributions.
You will also need to have a Delaware trust company or Delaware resident serve as a trustee. Often, this trustee job can be bifurcated into a Delaware situs trustee and an administrative trustee located elsewhere. Ideally, the administrative trustee would not be located in the state where the settlor lives.
Providing Incentives For Future Generations To Be Productive
When establishing a Dynasty Trust to encourage future generations to continue to work hard for their incomes, the trustee can be instructed to encourage supplemental income without spoiling beneficiaries. This type of trust allows for the creation of incentives or prerequisites for distributions. For instance, you may state that the distributions can only be made to match the beneficiary’s annual earned income or that young adults can only receive distributions if they complete an undergraduate degree. Usually, the provisions are more flexible in the discretion of the trustee.
Dynasty Trusts are not as complicated as you might think to set up, as long as you make the right considerations. The Williams Law Firm can assist you with these considerations as you establish a dynasty for your family. Please note that our firm does not provide a tax or asset protection opinion with regard to this trust.
Delaware Qualified Trustee Services
If you require a Delaware Trustee, in some limited situations with which we are entirely comfortable, we can discuss alternatives such as naming a Delaware individual with limited powers and duties to maintain the Delaware situs.
“Every time you help somebody stand up, you are helping humanity rise.”
– Dr. Steve Maraboli
Our Location
One Commerce Center
1201 N. Orange Street
Suite 600
Wilmington, Delaware 19801
Get directions via Google Maps
Phone: 302-575-0873
Fax: 302-575-1642
