The Dynasty Trust: A New Method of Creating an Inheritance

Web Admin - Thursday, March 20, 2014

illinois trusts estate planning attorneyDynasty trusts are a new type of trust that can be used to minimize the burden of certain taxes that the government levies on inheritance by holding the inheritance in a trust for many generations. These trusts have become more popular in recent years as states have begun to relax or abolish a legal doctrine known as the rule against perpetuities. The rule is a complex legal doctrine that limited the length of trusts and other legal instruments to only lasting a certain period of time, usually about two or three generations, depending on a variety of factors. Now that the rule is being relaxed, it has made dynasty trusts a more viable option.

What is a Dynasty Trust?

Simply put, a dynasty trust is a trust that holds assets from which future generations will benefit. This has important tax consequences because assets placed into a dynasty trust are subject to the federal estate/gift tax only once. This means that the assets can flow down to further generations without future estate taxes. For instance, if a person left $10,000,000 to their child without using a trust, this would exceed the gift/estate tax exemption, so it would be subject to the tax. Then, if that inheritance appreciated in value and the child passed it on to a grandchild, it would be subject to another round of taxes. If, instead of simply passing the money down in the first place, the person had placed it into a dynasty trust, then the original $10,000,000 would be taxed at that point, but it the appreciated amount would not be subject to another estate tax when it went to the grandchild.

Another benefit of the dynasty trust is that it can help reduce the effects of the generation skipping transfer tax (GST). The GST exists because people used to leave money directly to their grandchildren in an effort to avoid the double estate tax of the previous example. The GST can take as much as 55 percent of the money passed down to grandchildren in excess of $1,000,000. If the dynasty trust is created using that $1,000,000 dollar exemption, then it can sizably reduce the burden of transfer taxes on future generations.

This means that the dynasty trust can be a very useful estate planning tool for people with large families, or those who have enough assets that the estate tax and GST are serious concerns. Additionally, dynasty trusts are also useful for people who would like to have some say as to how their money is spent after their deaths because dynasty trusts can sometimes be used to control such things.

If you believe that your estate planning could benefit from the use of a dynasty trust, contact a Long Grove estate planning attorney today. Our firm helps handle tax planning issues for clients across the northwest suburbs, including towns like Riverwoods, Barrington, and Kenilworth.

About the Author: Attorney Jay Andrew is founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Recent Posts


insurance negligence Arlington Heights medical malpractice lawyer real estate residential real estate Schaumburg construction accident lawyer Illinois job attorney Chicago will attorney, social media platforms, Illinois estate planning lawyer, Affordable Care Act Illinois employment law traffic offenses Schaumburg personal injury lawyer Des Plaines real estate attorney traumatic brain injury personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys civil litigation attorney unauthorized overtime Detainer Actions senior citizens jet ski sole proprietorship Des Plaines personal injury attorney Mount Prospect wills and trusts lawyers Illinois elder law attorney Illinois personal injury lawyer Retaliatory Discharge investment property Barrington employment law firm car accident Arlington Heights tax lawyer field sobriety test Illinois real estate Des Plaines collections attorney hit and run accident Rolling Meadows estate planning attorney Arlington Heights Attorney condo association Illinois personal injury Rolling Meadows insurance lawyer Palatine injury attorney Arlington Heights car crash attorneys Illinois wills and trusts Arlington Heights car accident lawyer fiduciary rule Palatine probate lawyer employment lawyer insurance agent negligence independent contractor Rolling Meadows insurance dispute lawyers estate plan Arlington Heights wills and trusts attorneys Palatine traffic accidents unfunded trust Schaumburg personal injury attorney attorney fees boating under the influence Illinois employment lawyer Rolling Meadows Illinois employment law attorney brain injury Illinois DUI attorney personal injury accidents Long Grove wills and trusts attorneys workers comp denial of life insurance Fourth of July dealing with problem employees nursing home negligence DUI penalities POA traffic laws estate planning lawyer Illinois workplace discrimination attorney Federal Food Drug and Cosmetic Act trucking accident lawyers Rolling Meadows criminal lawyer liability claims in terrorem provision Kenilworth estate planning lawyer Crystal Lake criminal defense attorney pet bites paid sick leave no contest clauses startup company Illinois jet ski accident lawyer privacy laws Illinois medical malpractice lawyers Illinois wrongful termination lawyer CAM Chicago biking tips digital assets Illinois tax attorney Schaumburg estate planning lawyer Crystal Lake pet attorney fiduciary rule delay Rolling Meadows tax attorney modern family estate planning internet life insurance claims Schaumburg employment attorney first degree murder Illinois boating accident lawyer gift taxes wrongful death Illinois pedestrian accident attorney Illinois trusts attorney blood alcohol content medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers probate claims license reinstatement crossover accidents Long Grove real estate attorney Crystal Lake pedestrian accident lawyer Rolling Meadows traffic law firm job lawyers DUI defense Illinois medical malpractice claim Crystal Lake law firm Buffalo Grove law firm insurance denial appeals Schaumburg medical malpractice lawyer Arlington Heights TBI attorney Palatine business attorney food poisoning PTSD Barrington personal injury attorney expungement medical malpractice Crystal Lake employment law attorney pregnant women bad faith insurance claims car accident lawyer Barrington criminal defense lawyer Arlington Heights Traffic Lawyer Arlington Heights insurance attorney Rolling Meadows Attorney income distribution deducation estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers Jay Andrew elder abuse workplace sexual harassment insurance claim dispute attorney Crystal Lake bike accident lawyer overtime pay landlord tenant law Schaumburg criminal law attorney Thanksgiving pain and suffering living wills digital media accounts, estate planning, Arlington Heights estate planning attorney, Barrington civil litigation attorney consent to a search bike accident digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Crystal Lake car accident attorney foreclosed rental property Inverness civil lawyer tax attorney trench injuries power of attorney eluding a police officer healthcare claims Crystal Lake car accident lawyer Illinois medical malpractice case Inverness estate planning lawyer Fair Labor Standards Act Arlington Heights pedestrian accidents business litigation Schaumburg real estate lawyer murder insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys Illinois driving without license agent real estate closing Rolling Meadows personal injury lawyer Illinois mortgages swimming pools probate lawyer holiday statistics Des Plaines criminal attorney pedestrian accidents overtime violations Buffalo Grove employment lawyer texting and driving Palatine law firm Illinois bicycle safety Des Plaines drug lawyer products liability Palatine drug lawyer Kenilworth estate planning attorney institutional trustee Buffalo Grove probate lawyer Buffalo Grove criminal defense lawyer Barrington employment law attorney Joliet general practice lawyers Crystal Lake will lawyer drug possession ACA Palatine traffic lawyer Illinois construction accident attorney Palatine corporate law attorneys Des Plaines claims law firm Barrington attorney caretaker rights marijuana caregiver Deer Park accident attorney workers compensation benefits Palatine employment law lawyer Des Plaines pet law attorney School Visitation Rights Act Des Plaines drug crimes lawyer Legal Info Crystal Lake civil litigation lawyer Schaumburg criminal attorney Illinois attorney Illinois red light cameras privacy Policy Cancellation trust payments Rolling Meadows employment law attorneys insurance dispute attorney Landlord Tenant Ordinance suspended license Rolling Meadows employment attorney employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys Schaumburg elder law lawyer Barrington estate planning attorney digital evidence Rolling Meadows employment law attorney medical malpractice claims creditors Deer Park traffic lawyer Super Mario Rolling Meadows Traffic Lawyer Des Plaines real estate lawyer BAIID capital gains tax Illinois medical research employment law natural gas explosion Rolling Meadows insurance dispute lawyers, insurance dispute Illinois business lawyer Rolling Meadows medical malpractice lawyers Do Not Resuscitate Colin Gilbert Chicago insurance claim attorneys real estate lawyer Palatine estate planning lawyer new real estate form living trust vs will employees Palatine corporate attorney mortgage Arlington Heights injury attorney Illinois criminal defense attorney jet ski accidents Illinois traffic ticket lawyer construction accidents Rolling Meadows boating crash lawyer Exclusions real estate attorney Rolling Meadows business lawyer Barrington estate planning lawyer DGAA anesthesia errors traffic violations defense blended families Illinois trucking safety Illinois wills and trusts attorneys estate attorney low-ball insurance settlement Illinois registered agent bicycle accidents whistleblower protections slip and fall real estate contract Forcible Entry Crystal Lake tax lawyer Illinois insurance disputes Illinois lawyer Palatine civil litigation lawyer criminal law federal crimes life insurance lawyer Illinois personal injury lawyers natural gas motorcycle accident Deer Park medical malpractice attorney Arlington Heights wills and trusts lawyers automated cars personal injury claim Schaumburg civil litigation attorney DUI attorney Rolling Meadows insurance attorney Des Plaines DUI attorney IRS home inspection lawyer cell phone accidents landlord Illinois personal injury attorney Transfer on Death Instrument Arlington Heights personal injury lawyer Chicago will attorney Illinois living will Deer Park real estate law firm insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Buffalo Grove injury lawyer pedestrian injuries, pedestrian fatality preventable medical errors DNR Schaumburg wrongful death attorney Mount Prospect real estate lawyer condo Schaumburg traffic lawyer defective products lawyer Illinois estate planning attorney dog bites Barrington criminal lawyer probate claims process estate planning Crystal Lake traffic lawyer Chicago traffic lawyer federal regulations for LLCs reckless homicide Rolling Meadows litigation lawyer real estate attorneys Arlington Heights criminal lawyer small business Deer Park employment law attorney Crystal Lake medical malpractice lawyer Illinois car accident attorney contracts special needs trust denied insurance claim IRA trust transfer Liquor Control Act social media after death underfunded trust pedestrian-automobile accident speeding Buffalo Grove personal injury lawyer Illinois traffic attorney digital information traffic crimes Inverness injury lawyer Illinois law Rolling Meadows probate lawyer Barrington injury attorney employment law, Illinois employment laws Rolling Meadows corporate lawyer controlled substance Palatine trusts lawyer insurance claim denial Illinois Probate Act of 1975 head on collisions Arlington Heights real estate lawyer Crystal Lake medical malpractice law firm Inverness elder law lawyer Crystal Lake injury attorney fault based insurance insurance denials Illinois real estate lawyer Illinois insurance attorney Long Grove estate planning attorneys Inverness insurance attorney compensatory time Schaumburg employment law attorneys Buffalo Grove medical malpractice lawyers Rolling Meadows car accident lawyers minimum wage probate process Inverness real estate attorney Barrington drug crime attorney insurance agents rent to own real estate contracts mass shooting LLCs FMLA bicycle dooring accidents Deer Park traffic accident attorney power of attorney for healthcare Buffalo Grove insurance claim dispute lawyers cell phone employee discrimination Illinois probate lawyer Palatine construction attorney deadly crashes DUI car crash Crystal Lake accident attorney meal breaks medical malpractice compensation Illinois corporate lawyer Schaumburg insurance lawyers Palatine punch death Des Plaines accident attorney Barrington medical malpractice lawyers probate fees Illinois LLC creation Barrington boating accident attorney civil rights violation Illinois Smoke Detector Act Illinois injury lawyer medical marijuana unpaid assessment texting while driving Illinois insurance claim attorney appealing an insurance claim underage DUI traffic deaths car crashes drunk driving clemency Rolling Meadows criminal attorney distracted driving accident victims Illinois traffic laws college kids breach of contract preventing accidents rumble strips real estate leasing Illinois small business South Barrington real estate attorney vacation home fines traffic accidents sexual images Crystal lake insurance dispute attorney Food and Drug Administration's Food Safety Modernization Act drunk driving statistics ObamaCare Arlington Heights wills and trusts lawyer Crystal Lake personal injury attorney manufacturing unpaid overtime breathalyzer test Illinois collections attorney uninsured motorist life insurance policy estate tax revenge porn Deer Park criminal attorney Chicago trucking accident attorney Rolling Meadows marijuana attorney GM ignition switches Deer Park workers compensation lawyer operating agreements defective products work unions accidental death benefits insurance claim living trust benefits Illinois traffic accident lawyer distracted driving accidents pedestrian accident Attorney Ken Apicella traffic violations dynasty trusts premises liability elder law personal injury law firm Illinois employment law firm Illinois Human Rights Act Rolling Meadows accident lawyer Des Plaines Arlington Heights estate planning attorney insurance claim delay Illinois workers compensation lawyer Mount Prospect elder law attorney Chicago employment attorney employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Barrington Traffic Lawyer Schaumburg corporate attorney Illinois insurance claim dispute lawyers Arlington Heights traffic attorney Inverness probate lawyer comp time pizza emoji Buffalo Grove personal injury attorney Illinois Wage Payment and Collection Act Illinois pet lawyer insurance disputes Illinois workplace lawyer Rolling Meadows drug defense attorney construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Inverness real estate lawyer healthcare Arlington Heights trucking lawyer Arlington Heights personal injury attorney Chicago lawyer estate planning attorney Illinois traffic attorneys drug crimes Schaumburg personal injury lawyers Crystal Lake employment attorney spinal cord injury Illinois rollover accident lawyers FSLA surgical mistakes Inverness accident lawyer Buffalo Grove corporate attorney criminal record DMV owner responsibility Des Plaines medical malpractice attorney criminal defense insurance claims rollover accidents criminal TBI Illinois home inspection Des Plaines motorcycle accident attorney Buffalo Grove real estate attorney health insurance dispute wrongful termination slip and fall accidents truck collisions car collision Self-Directed IRA Accounts insurance dispute spinal cord injuries drugs pay when paid contract Crystal Lake medical malpractice attorneys Illinois business law atorneys estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, trucking accidents car crash injuries dram shop law Home Sale Contingencies Rolling Meadows DUI lawyer Illinois workers compensation attorney Deer Park personal injury lawyer insurance claim denials Illinois insurance dispute lawyers Palatine personal injury lawyer wage theft underinsured motorist insurance attorney Des Plaines tax law firm Family Medical Leave Act Illinois defective products attorney Barrington personal injury lawyer icy parking lots Illinois will lawyer disability benefits gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys trustee marijuana crimes attorney IRA benefits involuntary manslaughter wills and trusts Des Plaines injury law firm Long Grove real estate lawyer Illinois estate planning Colin H. Gilbert financial advisors Palatine insurance lawyer employment contract Crystal Lake traffic attorney Arlington Heights lawyer Illinois medical malpractice attorney irrevocable trust Palatine workers compensation lawyer ken apicella Schaumburg drug defense lawyer Deer Park DUI lawyer car accident lawyers severance agreements Schaumburg estate attorney Illinois Workers’ Compensation Commission Rolling Meadows personal injury lawyers Rolling Meadows personal injury attorney Inverness traffic law firm pet law problem employees taxes Buffalo Grove traffic lawyers child safety Inverness corporate attorney Illinois estate planning law firm Rolling Meadows traffic attorney driving Schaumburg Attorney subcontractor Illinois speeding lawyer denied insurance claims filing a medical malpractice claim Arlington Heights wills and trusts attorney trauma after an accident estate planning for college students Illinois Sales Representative Act Des Plaines personal injury lawyers Chicago employment lawyer Schaumburg probate wills Barrington Illinois estate planning lawyer Crystal Lake estate planning lawyer deed transfer auto accidents South Barrington real estate lawyer foreclosure Palatine real estate lawyer Arlington Heights employment attorney traumatic brain injuries llinois Real Estate Lawyers Association Whistleblower Claims Chicago estate planning insurance claim dispute Illinois insurance lawyer insurance adjusters Chicago corporate attorney Des Plaines Traffic Lawyer boating DUI rollover car crashes murder defense real estate zoning Chicago attorney BUI forming a corporation in Illinois Buffalo Grove traffic attorney Chicago car accident lawyer Rolling Meadows real estate attorney Crystal Lake insurance lawyer Deer Park motorcycle accident lawyer right to work Inverness personal injury attorney employment attorney product liability Des Plaines civil attorney comparative negligence liens medication errors personal injury loss of consortium traffic tickets Buffalo Grove car accident lawyer Palatine civil attorney Barrington real estate lawyer Illinois employment attorneys Illinois motorcycle accident lawyer Illinois Transfer on Death Instrument Arlington Heights employment law attorneys murder charges Illinois employment law attorneys homestead rights workers compensation living trust license revocation Illinois insurance claims lawyers BAC commercial leasing Illinois civil litigation lawyer back injuries license suspension trusts construction contracts Palatine employment attorney Palatine Attorney golf accidents Palatine elder law attorney Home Remodeling Repair Act Barrington litigation attorney Arlington Heights accident attorney Barrington workers compensation attorney boating accidents guardianship attorney Des Plaines insurance attorney commercial leases fatal car accidents commercial real estate Inverness DUI lawyer corporate law loopholes Schaumburg estate planning attorney Illinois employee rights attorney. Chicago insurance law firm Illinois insurance claim dispute lawyer Long Grove estate planning attorney cell phone tower data drug crimes lawyer Crystal Lake business law attorneys car accidents personal injury claims license Illinois employment laws changes to mortgage law vacation home Schaumburg car accident attorney Employment Discrimination Law life insurance civil litigation advance healthcare directive IRELA rest breaks Barrington business law firm personal injury lawyer sexual harassment personal injury attorney installment contracts wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Crystal Lake employment lawyer Long Grove estate planning Crystal Lake personal injury lawyer Chicago estate planning lawyer Class A misdemeanor hiring employees employee misclassification liability Palatine criminal defense lawyer Schaumburg probate attorney Palatine employment lawyer Riverwoods estate planning lawyer Schaumburg injury lawyer Mt Prospect Attorney Des Plaines personal injury lawyer employee rights motorcycle accident lawyer Barrington employment attorney hands free device Kenilworth estate planning attorneys estate planning trusts drug crime