Can a Dynasty Trust Protect Your Family Wealth in Arizona?

For many people, the aim of estate planning is to preserve wealth for future generations. Various estate planning strategies can help achieve this goal, including dynasty trusts.

A dynasty trust is a type of irrevocable trust structured to last for many generations. Its purpose is to minimize estate and gift tax liabilities that occur when assets pass to beneficiaries. By placing wealth in a dynasty trust, the trust-maker can preserve wealth for children, grandchildren, and succeeding generations and set terms for how relatives and beneficiaries receive their inheritances.

Why Are Dynasty Trusts Considered a Tool for Protecting Family Wealth?

Many families with substantial wealth turn to dynasty trusts to protect those assets for years to come.  Dynasty trusts can preserve generational wealth by minimizing or eliminating various taxes imposed on the transfer of wealth between families, such as gift taxes, estate taxes, and the generation-skipping transfer tax.

Dynasty trusts are also valuable for probate avoidance. Assets placed into a dynasty trust no longer count as estate assets subject to probate in Arizona.  When properly structured, placing assets in a trust also protects family wealth from loss through death, divorce, or creditor claims.

Learning more about the benefits of dynasty trusts can help you determine whether to incorporate one into your estate plan.

How Long Do Dynasty Trusts Last Under Arizona Law?

Although dynasty trusts provide a robust legal solution, there are limitations to consider during estate planning. A dynasty trust can last for several generations when the trust names multiple generations of family members as beneficiaries. In Arizona, a dynasty trust can opt out of the traditional rule against perpetuities, which usually restricts how long a trust may last, allowing such trusts to last for up to 500 years.

What Assets Can Be Placed Into a Dynasty Trust?

An individual or family can place various assets into a dynasty trust. Examples of property commonly put into dynasty trusts include:

• Stocks, bonds, and other investments or securities
• Real estate
• Cash
• Artwork and other collectibles
• Business ownership interests

Who Should Consider Creating a Dynasty Trust in Arizona?

Dynasty trusts may work best for individuals and families with specific estate planning objectives, such as:

• • Passing wealth to younger generations of their family
  • Minimizing or avoiding generation-skipping taxes
  • Reducing estate or gift taxes
  • Providing for the financial needs of multiple generations
• Keeping a sole proprietorship or other business interests in the family

Why Work with an Experienced Arizona Trust & Estate Lawyer

An experienced estate planning lawyer from Pennington Law, PLLC can help you protect your family’s wealth by developing tailored legal strategies to meet your needs. Our legal team can assess whether a dynasty trust best serves your estate planning objectives and, if so, establish a valid, enforceable trust that complies with state and federal laws.

Contact us today for a confidential consultation with a top-rated Arizona trust and estate lawyer.