A dynasty trust is an irrevocable trust that continues for as long as applicable state law allows. A dynasty trust can be drafted to avoid estate taxes, creditors and divorcing spouses for this period of time. The primary beneficiary can be given control of the dynasty trust by being named as the controlling trustee. A Nevada dynasty trust can last for up to 365 years and thus is one of the leading dynasty trust jurisdictions.
The articles below deal with different types of asset protection planning. There are articles on the Nevada Asset Protection Trust since Nevada is the only domestic jurisdiction that allows a person to set up a self-settled asset protection trust with only a two-year statute of limitations. There are also articles on drafting a dynasty trust, revocable trust or other type of trust with trusts that maximize asset protection.
An Inheritor's Trust is a special form of dynasty trust that is designed to receive an inheritance from a person who has not yet died. The concept originated from the desire to set up dynasty trusts for the benefit of our clients in the same way in which our clients set up dynasty trusts for their descendants.
Opportunity Shifting is the name we gave to the technique where our client's parent, grandparent or other person sets up a dynasty trust for the benefit of our client. Our client, as trustee of the dynasty trust, uses the gift made by the parent or grandparent to invest in a hot business or investment opportunity in the dynasty trust, thereby protecting the opportunity from estate taxes, creditors and divorcing spouses for the duration of the dynasty trust.
The installment sale to an income tax defective dynasty trust is one of the primary techniques used to move assets out of a wealthy person's estate into a dynasty trust without any gift taxes or generation-skipping transfer taxes.
A SCIN-GRAT is a mortality hedging technique that combines an installment sale (using a self-cancelling installment note) to an income tax defective dynasty trust with a grantor retained annuity trust. If the grantor dies sooner than expected, the dynasty trust funding is maximixed. If the grantor lives longer than expected, the grantor retained annuity trust funding increases and the dynasty trust funding decreases. No matter when the grantor dies, the estate tax savings is significant because of the mortality hedge.
A GRAT (Grantor Retained Annuity Trust) is technique used to move significant wealth out of a person's estate with no gift tax. It is considered a very safe technique because there is almost no gift tax risk despite the huge upside. Unlike a dynasty trust, a GRAT can only continue for one generation without an additional transfer tax. One potential strategy around this is to sell the remainder interest in the GRAT to a dynasty trust.
A revocable trust is used to avoid probate and to use a person's remaining estate tax exemption and generation-skipping transfer tax exemption to maximize tax benefits. To the extent, the revocable trust is funded during life, those assets avoid probate. Assets left out of the revocable trust will go through probate. For example, a Nevada resident who dies and hasn't fully funded his revocable trust will need a Nevada probate attorney (Nevada probate lawyer). Oshins & Associates has a large Nevada probate practice. A Nevada probate attorney (Nevada probate lawyer) from Oshins & Associates will make the probate process a smooth one.