DISGUSTING!!!!! Why do people think this way? I condemn this trust to HELL!!! In a handbasket!!!
“The Dynasty Trust is an excellent tax planning vehicle as it permanently removes significant assets and the future appreciation on those assets from the transfer tax system. If no one “owns” these assets in the future, they will not be part of anyone’s taxable estate. In addition, the Dynasty Trust is an excellent asset protection vehicle. With no owner’s of the assets, creditors cannot make successful claims against the assets in these trusts, allowing them to be preserved, even against liability claims against the trust’s beneficiaries.
The trust is initially created for “primary beneficiaries” who are the Grantor’s children. They are given a limited power of appointment over the trust property in favor of their descendants. If this power is not exercised, the trust property passes to the descendants of the Grantor’s children, and so on. The trustee has discretion to pay a beneficiary income and principal from the trust, but is under no obligation to distribute any property at any time.
The trust is sensitive to the possible generation-skipping tax issues that can arise in this type of trust. (Section 3.1B). The trustee is given broad investment discretion. (Sections 3.1A and 3.3)
Since the trust is intended to last a very long time, the initial trustee is not likely to outlive the trust. Circumstances unforeseen at the inception of the trust may very well occur. For these reasons, the trust (section 4.5) appoints a “trust protector” – a person or institution to serve as the trust’s “watchdog” over what may need to be changed, amended, removed, etc. as time goes on.
Article 10 is also worth noting. The Grantor should consider how he/she may want to define such basic terms as “spouse” and “child”, given the potential long-term of the trust and evolving issues of social change, genetic engineering, etc. One can consider a “traditional” definition here, or allowance of either present or possible future definitions to be included in the trust.