Definition - What does Dynasty Trust mean?
A dynasty trust is a special type of trust that families can use to transfer wealth and assets from one generation to the next. These trusts are designed to be long-term and exempt from certain taxes, including the gift tax.
Dynasty trusts are often used as a complement to life insurance to maximize the amount of wealth that is transferred after the policyholder dies.
Insuranceopedia explains Dynasty Trust
A key feature of dynasty trusts is that they reduce the amount of money that has to be paid in estate taxes. The resulting savings can be substantial for high-net-worth individuals and, therefore, makes it an appealing option for passing their estates on to their children and grandchildren.Unlike other types of trusts, dynasty trusts are designed to last for long periods of time.
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