Dynasty Trust

Most estate plans address only the client’s immediate wishes involving their children and grandchildren. Through the use of documents such as the Dynasty Trust, The Avelino Law Firm addresses multi-generational goals, i.e. Legacy Wealth.

Many times family wealth is stripped away by estate taxes and divorce.  A Dynasty Trust allows money to stay within a family for generations while being estate tax and creditor protected. 

Life Insurance
If a client has life insurance a generic estate planning attorney will create an Irrevocable Life Insurance Trust (ILIT) that will own, and be the beneficiary of, the life insurance policy- thus avoiding estate taxes.  However, the ILIT will avail itself to creditors once proceeds are distributed to beneficiaries.

The Avelino Law Firm will create a Dynasty ILIT that will allow the life insurance proceeds to be held within the trust for multiple generations while providing estate tax protection for the client’s estate and each subsequent estate, and, the Dynasty ILIT will provide creditor protection for generations as well.

Real Estate
If a client owns a valuable piece of real estate, it will be added to his or her estate upon their death, thereby incurring estate taxes. In many cases, it will have to be sold to pay estate taxes.  If the real estate is not sold for to pay estate taxes, it will be open to creditors and subsequent estate taxes.

The Avelino Law Firm can create a Dynasty Trust to hold the real estate thereby reducing the current estate tax consequence and protecting the real estate from estate taxes and creditors.

Stocks, Bonds, and Securities
The total value of your investment portfolio will be added to the overall value of your estate.  Therefore, upon the surviving spouse’s death the investment portfolio may have to be liquidated to pay estate taxes. Furthermore, the once the remaining portion of the portfolio is passed on, it will be open to estate taxes and creditors of your beneficiaries.

The Avelino Law Firm can create a Dynasty Trust to hold the investment portfolio in order to reduce the current estate tax consequence and protect the investment portfolio from beneficiaries’ estate taxes and creditors.

Prepare for Wealth
The Dynasty Trust is created and a friendly trustee (who is not a beneficiary) is appointed to carry out the terms of the trust.  Beneficiaries (children, grandchildren, etc.) have a limited power of appointment to elect new trustees through the years thereby ensuring a friendly trustee is carrying out the trust terms.

The Dynasty Trust is not only for the wealthy—why wouldn’t everyone who has life insurance want to pass the proceeds on for multiple generations with estate tax and creditor protection? Why wouldn’t anyone want to leverage some money now into greater family wealth for generations?

Your great-grandchildren, who might not yet exist, will be getting distribution checks with your name on them. Think of the legacy that you will leave behind.

Did you ever ask yourself how so many families retain wealth for generations? The Rockefellers, the Kennedys- doesn’t it seem like these families haven’t done anything in a while to warrant such wealth?  The reason is that they don’t own anything- family trusts do.  It is their Dynasty Trusts that have enabled these families to avoid estate taxes for generations, and survive divorces throughout the years.

The drawback is that you do not own whatever property is in the Dynasty Trust. 

The benefit is that you do not own whatever property is in the Dynasty Trust.  Therefore, it is not included in your estate (to the extent possible) and is creditor protected.  The Avelino Law Firm follows the great words of John D. Rockefeller, “Control Everything, Own Nothing.”.