The Generation-Skipping and Dynasty Trust
Sept. 6, 2022
While it is natural to think of leaving your estate outright to your children and grandchildren, in many cases it may be better to place your assets into a trust for their benefit, and give an independent trustee the discretion to make or withhold distributions as circumstances might require.
Since 2018, a trust can continue for 360 years, so a trust can be set up to continue through multiple generations.
If your estate is large enough that federal estate taxes are a concern – above $12.06 million for an individual in 2022, or above $24.12 for a married couple, a so-called "dynasty" trust can keep these assets out of the estate tax system for multiple generations. If you have several children, the trust might be held as a collective fund for all of them, or divided into equal or unequal shares, with further division into separate trusts at each generation.
To allow for more flexibility, you might want to give each beneficiary a limited power to appoint the remainder of his/her share at death outright or in further trust among your descendants. So long as the beneficiary does not appoint to his/her own estate, the trust assets will not be treated as part of the taxable estate, and if the power to appoint is not exercised, the trust would continue from one generation to the next.
How an Attorney Can Help
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PARENTING TIP:
PRACTICE KIND AND FIRM POSITIVE PARENTING
When it comes to discipline, it seems hard to remain positive, especially when you’re dealing with behavior problems. But it is possible by using positive discipline and avoiding harsh discipline.
Being a good parent means you need to teach your child the morals of what is right and what is wrong.
Setting limits and being consistent is the golden rule to good discipline. Be kind and firm when you set rules and enforce them. Focus on the reason behind the child’s misbehavior. And make it an opportunity for them to learn for the future in a positive way, rather than to get punished for the past.