When we consider our mortality, we often think about the legacy we will leave behind for future generations. We may wonder whether our descendants will remember our accomplishments or shortcomings. William Shakespeare wrote, “The evil that men do lives after them; The good is oft interred with their bones.” Julius Caesar, Act III, Scene 2.
How can you ensure that your legacy lives on?
One way to ensure that your legacy lives on is to create a dynasty trust, allowing you to leave assets and control how they will be used for future generations. In the past, every state had a limit on how long a non-charitable trust could exist, called the “Rule Against Perpetuities,” which required property to vest within 21 years of the death of the person who created the trust. However, many states have repealed this rule for trusts, allowing them to continue indefinitely.
A dynasty trust can allow money held in the trust to grow exponentially through the power of compound interest. For example, a single dollar invested for the term allowable in Utah and Wyoming would grow to nearly $7 trillion in today’s dollars. With a dynasty trust, you can keep the money in the trust for generations and pay it out for your descendants or any other purpose you choose. Your descendants can also be the trustees of the trust and have discretion over distributions. Additionally, a dynasty trust can be drafted to be free from estate and gift taxation and the creditors of your descendants.
While a dynasty trust may not be suitable for everyone, it can be an effective way to preserve your legacy and ensure that the good you do continues long after you are gone. An estate planning attorney can assist you in creating a dynasty trust or other planning strategies to achieve your goals and protect your legacy.
Compliments of the McGee Law Firm, Attorney Brandon McGee