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


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