On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Monday April 21st, 2025.
Florida is one of the best states for wealthy families who want to protect their legacy for generations. Thanks to state laws that allow long-lasting trusts, families can build and pass on wealth while avoiding major tax hits, especially the generation-skipping transfer (GST) tax. A dynasty trust is one of the most effective ways to do this, but it needs to be set up with the right strategy.
How Dynasty Trusts Keep Wealth in the Family
A dynasty trust is an irrevocable trust that can last up to 360 years in Florida. This allows wealth to pass from generation to generation without being taxed at every step. Instead of handing assets directly to children and grandchildren, which can trigger estate and gift taxes, the trust holds and manages the assets on their behalf.
Since the assets are never owned outright by each generation, they are shielded from estate taxes and creditors. This setup also prevents the funds from being included in divorce settlements or lawsuits.
Avoiding the GST Tax
The GST tax applies to transfers made to someone two or more generations below the giver, such as a grandchild. It’s a 40% tax that can seriously reduce what’s passed down. However, a dynasty trust funded with the federal GST exemption of $13.99 million per person in 2025 can avoid this tax altogether.
Because the exemption amount is expected to shrink after 2026 ($7 million after inflation), now is a smart time to take action. Once the trust is funded using this exemption, the assets can grow and be passed down tax-free for hundreds of years.
Florida’s Advantage for Long-Term Planning
Florida’s 360-year trust limit gives families more time than most states to let their wealth grow. Plus, trusts created here can be used by non-residents if they use a Florida-based trustee. This flexibility makes Florida a popular choice for those looking to avoid future estate tax changes.
At the Law Office of Wickersham & Bowers, we help high-net-worth families create dynasty trusts that protect their assets and reduce long-term tax burdens. If you’re thinking about setting up a multigenerational plan, contact us to schedule a consultation.
