A dynasty trust is not a separate legal category of trust. Instead, “dynasty trust” refers to a design feature: an irrevocable trust drafted to last for multiple generations and structured to avoid estate tax, gift tax, and generation‑skipping transfer tax (GST) for as long as state law allows.
In other words:
A dynasty trust is any irrevocable trust that is (1) funded with GST‑exempt assets and (2) drafted to continue for children, grandchildren, and beyond.
The dynasty feature can be added to several types of irrevocable trusts.
A properly structured dynasty trust can:
- Keep assets outside the taxable estates of children, grandchildren, and future generations
- Provide creditor and divorce protection
- Allow assets to grow free of transfer taxes
- Preserve family wealth for centuries in states that allow perpetual trusts
This makes the dynasty feature one of the most powerful tools in modern estate planning.
Examples of Trusts That Can Include Dynasty Features
- GST‑Exempt Irrevocable Gift Trust (Most Common)
- Family Trust / Descendants’ Trust
- SLAT (Spousal Lifetime Access Trust) with Dynasty Provisions
- ILIT (Irrevocable Life Insurance Trust) with Dynasty Duration
- Long‑Term Asset‑Holding Trust (Business, Real Estate, Investments)
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