A dynasty trust
ensures that each generation will receive sufficient income to live, but be unable to divert remaining assets from future generations.
The new budget plan proposes limiting the existence of a dynasty trust
, which currently can exist perpetually, to 90 years.
Thus, if "John Doe" created the trust, the name section of the Form 1099 or Schedule K-1 would contain the following: "John Doe, grantor of the Doe Dynasty Trust
5 million for a married couple) will make it easier and simpler to fund a dynasty trust
Richard Nenno, a leading expert on and proponent of dynasty trusts
, provides the following contrasting examples--which are admittedly oversimplified--of a dynasty trust
funded with $1,000,000 and a bequest that is subject to estate tax at 45% every 25 years:
2004 Dynasty Trust
and Jocelyn Woolworth 2004 Dynasty Trust
You can also set up a dynasty trust
, which avoids the generation-skipping tax by using the exemption and by picking the right state to create the trust, such as Delaware.
The ILIT should be drafted as a dynasty trust
which is an irrevocable trust that is protected from estate taxes for as long as applicable state law allows.
Other Travelers Life & Annuity estate planning products available on WebStory include supplemental income, family income trust, lifetime exemption trust, credit shelter maximizer and family dynasty trust
How dynasty trust
planning will be different and more popular, with back up benefits for the donors
This customized presentation system, which links directly from Travelers Life Illustration System and Travelers WinFlex, will focus initially on estate planning products, including Travelers Life & Annuity's supplemental income, family income trust, lifetime exemption trust, credit shelter maximizer and family dynasty trust
Grantors with sufficient means to plan for more than one generation of heirs should consider creating a dynasty trust