“So, is it fair to your client to advise them to plan based on a tax system that is statistically bound to change several times within their life?”

Let’s talk Dynasty Trusts!

A Dynasty Trust is a trust designed to avoid estate taxes being applied to family wealth with each transfer to subsequent generations. By holding assets in the trust and making well-defined distributions to each generation, the entire wealth of the trust is not subject to estate taxes with the passage of each generation. Assets in dynasty trusts can grow and be protected from your descendants’ creditors, former spouses, and their own wasteful habits.

So here is where some might argue that with the estate tax exemption currently at 5.43 Million dollars, plus discount and credit sheltering, the need for traditional estate planning is far less of an issue for all but the wealthiest individuals. Not So!!! One only need to look at the many changes in the estate tax law since it was first enacted in 1916. It has been repealed and reenacted a number of times, and the exemption amount, rules, and tax rate keeps changing…up and down. So, is it fair to your client to advise them to plan based on a tax system that is statistically bound to change several times within their life?

Prudential has crafted a couple of fantastic tools to help you and potential clients better understand the concept. The links for are below.

The first is a PowerPoint presentation that is designed to teach advisors the basics of multi-generation planning. It’s perfect for use as the centerpiece for a firm meeting.
Dynasty Trust Presentation

The second is a booklet that is approved for use with the general public. It is designed to acquaint the public with the issues, challenges, and solutions for passing wealth to succeeding generations.
Dynasty Trust Brochure (Consumer)