On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday January 21st, 2025.
Building and protecting family wealth is something many families in Florida think about. You work hard to create financial security, so it only makes sense to ensure that your wealth benefits not just your children but future generations as well. One smart way to do this is by setting up a dynasty trust.
What Is a Dynasty Trust?
A dynasty trust is a long-term, permanent trust designed to hold and protect family wealth for generations. Unlike other types of trusts that eventually end, a dynasty trust can last indefinitely, depending on state laws. In Florida, these trusts can continue for hundreds of years.
One of the biggest advantages of a dynasty trust is that it shields assets from estate and generation-skipping transfer taxes. For example, let’s say a family transfers $13 million into a dynasty trust before the 2026 tax exemption change. That money could grow into hundreds of millions over generations—without being chipped away by estate taxes.
Why Consider a Dynasty Trust?
Here are some solid reasons why Florida families might want to create a dynasty trust:
- Tax Savings: Assets in a dynasty trust are not subject to estate or generation-skipping taxes, which means more money stays in the family.
- Protection From Creditors and Lawsuits: Since the trust owns the assets—not the beneficiaries—they are safe from creditors, lawsuits, and even divorce settlements.
- Control Over How Money Is Used: Grantors (the people who create the trust) can set clear rules for how the money is used.
- Flexibility in Asset Management: You can fund the trust with cash, real estate, investments, or even business interests. This makes it easier to manage and grow wealth over time.
Important Legal Considerations
Setting up a dynasty trust is not something to take lightly. Families need to think carefully about choosing the right trustee to manage the trust. A trustee handles everything from managing investments to making sure the trust follows state laws. Some families even choose to base their trust in states with friendlier tax laws, like Nevada or South Dakota, while still benefiting from Florida’s legal protections.
Securing Your Family’s Future
Are you ready to start building your family’s legacy? Contact Wickersham & Bowers today to learn how we can help you protect your wealth for generations to come.