Definition of 'Dynasty Trust'
There are a few different types of dynasty trusts. The most common type is a grantor trust. A grantor trust is a trust that is created by a person who is also the trust's grantor. This means that the grantor retains control over the trust assets, and they are also responsible for paying the taxes on the trust income.
Another type of dynasty trust is a non-grantor trust. A non-grantor trust is a trust that is created by a person who is not the trust's grantor. This means that the grantor does not have control over the trust assets, and they are not responsible for paying the taxes on the trust income.
Dynasty trusts can be used for a variety of purposes. They can be used to provide financial support for a family over time, and they can also be used to reduce taxes. Dynasty trusts can be complex, so it is important to work with an experienced estate planning attorney to create a dynasty trust that meets your specific needs.
Here are some of the benefits of using a dynasty trust:
* Dynasty trusts can provide financial support for a family over time. This can be helpful for families with multiple generations, as it can ensure that there is money available to support each generation.
* Dynasty trusts can reduce taxes. By transferring assets into a dynasty trust, it is possible to reduce the amount of taxes that are paid on those assets. This can be a significant benefit for families with a high net worth.
* Dynasty trusts can provide flexibility. Dynasty trusts can be structured in a variety of ways, which gives families the flexibility to meet their specific needs. For example, dynasty trusts can be used to provide for education, medical expenses, or retirement.
If you are considering using a dynasty trust, it is important to work with an experienced estate planning attorney to make sure that the trust is structured in a way that meets your specific needs.
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