What is the Dynasty Trust? | Mark J Kohler | Tax & Legal Tip

Hi mark Kohler here, and I want to talk to you about the dynasty trust now as an attorney

I've drafted a lot of trust for clients over the years and the dynasty trust is a fun one

It's a unique one where our law firm over the last 15 years

we've we've really kind of tailored our practice to business planning and estate planning and the dynasty trust is a

Wonderful fit for a lot of clients trying to leave a legacy now

I wanted to use the whiteboard to discuss where the dynasty trust fits because it's not your typical estate plan in fact

It complements it now if you've watched some of my videos. You know where we're going with this

we're gonna have your basic revocable living trust or

Rlt the foundation of your estate plan and your trust is going to own say your S corporation

And it would own your LLC's


your rental properties

Let's say that sort of thing and this is just your basic kind of

Three-legged stool your operations your LLC's for rentals, and then your trust is the foundation now off to the side

Your trust would also own your primary residence or your home. We might have some life insurance

And investment accounts and maybe even IRAs or 401ks

Flow into your trust upon your passing we use the see-through type trust for that

So our see-through provision in your trust so all this flows into

Your trust now

Where's the dynasty trust bit so here's where I like to put the dynasty trust we want to put it off to the side

It's not your foundation revocable living trust

That has all sorts of provisions

for the kids and your

Loved ones that our spouse and watch my other videos on the revocable living trust why it's in my youtube channel, please go subscribe

but the dynasty Trust is going to be funded with different types of assets and kit and it can have a

Huge variety of assets and you might put real estate in it you might have some life insurance fund it maybe even a different policy

than the one that you have going to your kids or grandkids or something this could be a

Different type of life insurance policy that comes into here

And it funds it so that when you pass away

this trust is

funded in you could even carve out a certain percentage of your

revocable living trust to come into the trust and

You may even say I want a portion on my home equity to go into my trust so when you design this you

Compliment your revocable living trust and say hey, here's how I want to fund it

This is the the first issue of a dynasty trust is

Where is it going to go and what am I going to put into it now?

I'll describe more about the trust here in a moment

But this key point is we want this dynasty trust to be again a compliment to your revocable living trust, and we're going to define

What money is go into it, and you might say well? I want a million dollars to go into this

I want a hundred thousand dollars to go into it

But but we'll figure this out as we design it as to how it's going to get funded

now let's talk about kind of the features of a dynasty trust the main thing about a dynasty trust is that it has a

separate purpose or a specific purpose

from your revocable living trust we

Typically what I designed these for is education you say I want to leave a legacy for my kids my grandkids my great grandkids

bah, bah bah bah, bah

I want to have a specific purpose maybe

education and I'm gonna put money into this and I want it to fund the tuition of

all my posterity for the next hundred years

Which brings us to point to the reason?

Why it's called a dynasty trust is because it can last?

Longer than a regular trust the regular trust has this rule called the rule against perpetuities

Where a trust by definition cannot be allowed to survive past 21 years

Past the last beneficiary it has to end this has been the rule for hundreds of years well the dynasty

Trust is a rule that came about in certain states, and that's where we design. It is what state to use

that's a whole other topic, but we'll bring them to the dynasty trust the provision that it can last for maybe a hundred years or

150 years you can set it up to last as long as you want as long as it can survive and this hundred years plus

provision allows you to set up education funds for a certain dollar amount for a hundred plus years and

Goes into this trust to be spit out based on different rules that you have to have a certain GPA

You have to be so old and you can't live on it forever to go to college forever

Or if you want to go back to college maybe you can put all these different rules in this dynasty dynasty trust

separate from your other estate plan to last more than 100 years and

Give it a specific purpose that could work okay now the last point

I wanted to make is that we call this a grantor trust now without getting too technical

What this means is I don't want to set up a trust that's going to need a separate tax return while you're alive at least

I want while you're alive to be able to control it

Possibly even amend it and I want to put a certain amount of dollars into it upon your passing or even maybe while you're alive

But I don't want to do a separate tax return

I want it to be a grantor Trust where you still file your 1040 tax return?

And you're not signing up for a huge cost every year to maintain this thing now if you want to set up an irrevocable trust

For some asset protection or privacy or hide some money and a certain time to trust all right

That's a something that we can add to the dynasty trust as a feature but most dynasty trusts

Are you carve it out? You set it up you put some money into it?

There's no extra tax return or you can fund it after your passing anyway

Did I really call this a two-minute tax on legal tip I think I do?

But I just go on and on because I have too much fun doing this

please folks if you're

Interested in a dynasty trust don't pound this out on Google trying to find a template yet with a lawyer that can do it affordably

We do it in the range of 1,500 bucks to 2,000 max it can be very very affordable to craft it to your situation

It's there for the rest of your life

You can do a little

amendments or change it later if you want to but our law firm would love be of service if you need it and

Shop around don't get soaked because you're wealthy or have a lot of money or this or that and so you have to pay more

This can be affordable no matter what price range of

income you make every year or how much you're worth or how much you want to put into it so shop around and

Enjoy leaving a legacy or a dynasty

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