Did you know that unprotected wealth is wealth just waiting to be taken advantage of? It’s true – those vulnerabilities really begin to pile up when taxes, creditors, and generational mismanagement are added into the mix.
If you really want to protect your legacy, then a dynasty trust is worth thinking about because it’s the cornerstone of a long-term approach to building wealth – a cornerstone that will survive virtually anything against which it could be challenged.
Our clients are those managing more than $10 million of assets, and they are not interested in quick fixes. Real wealth preservation is, in their view, about creating a legacy that extends for generations to come. A dynasty trust protects your assets in a powerful way and makes them a lasting legacy.
The Core of a Dynasty Trust: Generational Wealth Secured
A Dynasty Trust is not an asset type you want to pass up. It’s the structure, an irrevocable one, to perpetuate your wealth for many generations and from estate and generation-skipping taxes.
The assets that are passed into a dynasty trust are untouchable by estate taxes, provided the trust is kept up to its standard. We’re not talking amateur hour here. An incredible thing about a properly constructed dynasty trust is that it can last centuries, if not infinitely, depending where it has been drawn up.
For ultra-high-net-worth individuals (UHNWIs), that’s a dollar that can keep compounding for future generations rather than tax coffers. This is what we consider to be successful wealth governance. It’s deliberate, it’s uncompromising, and it works.
Why Acting Now Is Non-Negotiable
If you think the U.S. tax code is generous, think again. The current lifetime gift and estate tax exemption – a lofty $13.61 million per individual in 2024 – is a temporary anomaly. Come January 1, 2026, that number will be slashed in half, reverting to roughly $5 million, adjusted for inflation. Everything above that will face a staggering 40% federal tax.
Translation: Inaction Will Cost You
For those with estates worth protecting, the message is clear: the time to act is now. By establishing a dynasty trust and transferring high-growth or income-producing assets before the laws change, you lock in today’s exemptions. Failure to do so is an open invitation for tax authorities to chip away at your legacy.
Key Features of a Dynasty Trust
Tax Efficiency Across Generations
A dynasty trust isn’t your typical tax shelter. On the contrary, it’s a fortress. Properly structured, it sidesteps estate and generation-skipping taxes at every generational transfer. The result? They grow assets compounding unencumbered wealth not meddled with by unnecessary government interference. Consider this example:
- A $13 million estate with a dynasty trust will dwindle to $166 million by the fourth generation after successive tax hits.
- That same $13 million estate expands to $528 million by the fourth generation when protected by a dynasty trust.
The difference is staggering. But more than that, it’s entirely avoidable if you know what you’re doing.
Protection from Creditors and Legal Claims
A dynasty trust places assets firmly out of reach. No creditor, no lawsuit, and no opportunistic ex-spouse can touch what resides within its boundaries. For UHNWIs, this level of protection isn’t optional – it’s mandatory. Anything less leaves your wealth exposed, which is simply unacceptable.
Perpetuity in Certain Jurisdictions
Most trusts have a shelf life capped by outdated legal constructs like the “rule against perpetuities.” Not so with a dynasty trust established in jurisdictions like South Dakota or Delaware, where it can operate indefinitely. If you’re serious about building a dynasty, location isn’t an afterthought but a cornerstone.
Critical Considerations When Establishing a Dynasty Trust
You can definitely create a dynasty trust, but you need to get it done right. You can make amazing mistakes, and you just don’t want to settle for average. Let’s break down what you really need to get right:
Jurisdiction Matters
The state where your trust is established dictates its lifespan, tax benefits, and overall effectiveness. Some states are inherently superior – South Dakota, Nevada, and Alaska, to name a few. They offer advantages like no state income tax on trust assets and legal frameworks designed for perpetual trusts. Appointing a corporate trustee based in these jurisdictions unlocks these benefits, regardless of where you live.
Asset Selection
Not all assets belong in a dynasty trust. High-growth investments, income-generating properties, and business interests deliver the most value when sheltered. The wrong assets, or worse, a poorly managed trust, will dilute the benefits. Precision is non-negotiable here.
Beneficiary Access
Wealth rarely survives the third generation. To avoid this fate, grantors impose strict rules on distributions. Limiting funds to health, education, maintenance, and support (HEMS) is standard. But tailored incentives – like distributions tied to professional milestones or education – preserve both wealth and family discipline.
Timing and Funding
Delay is expensive. Lump-sum funding locks in today’s high exemptions, while staggered contributions leverage annual gift exclusions to minimize exposure. Procrastination in this area is unwise and irresponsible.
Trustee Selection: The Foundation of a Dynasty Trust
The trustee makes the trust only as good as the trustee is responsible for making that trust effective. Even the most well-thought-out plans can be undone with mismanagement, tax inefficiencies, and poor compliance. Experienced in long term wealth management and with an unrivalled in depth knowledge of international trust laws, Dominion’s global network offers trustees to its clients. Anything less than this level of competence isn’t worth your time.
Why Does Dominion Stand Out?
We wouldn’t settle for less because we know you wouldn’t, either. In this industry there are lots of inexperienced players such as resellers who just outsource outdated products without understanding the subtleties of international wealth governance. Not at Dominion.
Our global network provides us with a benchmark store of strategies, which must adapt to changes in laws and the market. And we always remain neutral – we’ve never been controlled by a particular jurisdiction or ideology. You know it all is about balance and perspective. This flexibility enables us to build those trust structures in a secure form and make them fit for your goals.
Dominion’s approach is a very evidence‑based approach and is the result of years of case law and practical experience. And it’s tried and true; you can see how it works in the real world. Our strategies for protecting your wealth from taxes, protecting it from creditors, and making it last for future generations have been tested.
Using Dynasty Trusts as an Effective Method of Wealth Management
Dynasty trusts are viewed by Dominion as part of a greater totality. Wealth governance is not about keeping what you have but unlocking its full potential.
Indeed, setting up a dynasty trust is just the beginning of a much bigger journey.
We have gathered the best wealth protection and investment management strategies, the top tax-saving and individualized structures to maximize and secure your wealth.
All of this is combined into one strategy that takes what you might consider a fixed asset (a dynasty trust) and turns that into something dynamic, with a potential for growth over generations.
The Global Edge: Jurisdictional Agility Done Right
Wealth governance isn’t a set-it-and-forget-it operation. It requires constant vigilance and the ability to pivot with precision. A dynasty trust’s value lies in its resilience against shifting laws, regulations, and geopolitical changes – a level of sophistication most providers can’t begin to deliver.
Given Dominion’s global reach, your trust is not limited to any one country. And that means a lot more flexibility on your part. That’s because some areas are hostile, enacting additional levies or regulations. Others become favorable, offering fresh advantages. The amateurs react to these changes, often too late. Dominion anticipates them. Our integrated network moves assets seamlessly into better jurisdictions before your wealth even feels a ripple.
This isn’t about patchwork fixes or guesswork. Dominion uses real-time analysis and decades of expertise to keep your trust not just compliant but optimized. Where others scramble to follow new rules, we operate several steps ahead, leveraging the best opportunities to ensure your trust’s flexibility, security, and growth potential remain uncompromised.
Dominion doesn’t chase trends. We set the standard for wealth governance that adapts to an ever-changing world. Your legacy deserves nothing less. So if you’re ready to secure your wealth with the direction of the experts at Dominion, schedule your consultation today. Find out what true jurisdictional agility looks like.
Dominion Understands the Need to Act Fast
How can we help you secure your legacy for the long haul? It starts with acting right away to take advantage of a dynasty trust. Lifetime gift and estate taxes are on their way down and it is only a matter of time before that occurs. The time to take action is now, and we’re here to help you every step of the way.
As you can imagine, Dominion customers deserve nothing less than the best so we’re here to stand behind you, providing you with our unmatched asset protection quality. Pick up the phone and speak to the pros about what the Dominion difference might do for your financial legacy.
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