Maybe you’re not Bill Gates or Donald Trump, but you’ve worked hard to build up a small business empire of your own. Now that you’re closing in on retirement, you’d like to preserve most of your assets for your family without paying an arm and a leg in taxes.
Strategy: Set up a dynasty trust. Unlike a typical trust lasting for a limited term or ending upon a specified event, a dynasty trust can span several generations without triggering adverse tax consequences.
And there’s more. Besides the tax benefits, the trust may be used to protect your wealth under the personal conditions you impose (see box below).
When should you establish a dynasty trust? There’s no time like the present. Your family may benefit from the generous $5 million estate tax exemption currently allowed by law.
How a dynasty trust works
In brief, you transfer assets to a trust—either as a lifetime or a testamentary transfer—and designate a trustee to admi...(register to read more)