What Are the Benefits of a Dynasty Trust?

An irrevocable trust has you relinquish your ownership rights over certain property and assets so they are not counted toward your taxable estate. Therefore, your property and assets may be preserved as much as possible for your designated beneficiaries. One of the irrevocable trust options used in New York State, especially amongst high-net-worth individuals, is the dynasty trust. With that being said, please continue reading to learn the most significant benefits of a dynasty trust and how an experienced Putnam County trusts attorney at the Law Office of Andres D. Gil, PLLC can help determine whether it is in your best bet to establish one.

What are the greatest benefits of a dynasty trust?

Most notably, a dynasty trust may allow you to evade the Internal Revenue Service’s instituted generation-skipping transfer (GST) tax. This may make such a significant difference for your designated beneficiaries, as this tax rate is set at 40 percent as of 2025; which is taken if you do not meet the exemption amount of $13.99 million.

In this way, you may be able to make a legacy for yourself and your family. This is because your dynasty legacy may allow your property and assets to last for more generations than without one. It is common for this trust type to last for over 100 years. After all, you may include descendants who have not been born yet as your designated beneficiaries, such as your great-grandchildren. And in New York State, this trust type is allowed to extend for 21 years after the death of your final surviving beneficiary.

Under what circumstances is a dynasty trust not the best option?

The dynasty trust appears to be an ideal choice, but only if you have the right life circumstances. That is, this trust type may not be worth it if you have a small family lineage. For example, if you only have one child, and that child has expressed their lack of intention of having offspring of their own.

In this case, you must not shy away from the idea of an irrevocable trust completely, as many different options may still be beneficial to you and your designated beneficiaries. After all, any irrevocable trust may work to protect and preserve your assets in unfortunate events, such as creditor collections or divorce proceedings. They still do the job of curbing the probate process, which may be physically, emotionally, and financially draining for your beneficiaries during an already difficult time in their lives.

Speaking with an attorney is never a bad idea, even if you are unsure whether you require legal advice to set up your estate plan just yet. So when in doubt, please schedule an initial consultation with a skilled Putnam County estate planning attorney at the Law Office of Andres D. Gil, PLLC today.