One of the primary concerns in estate planning today is keeping family assets in the family line. We live in a country in which 50% or more of marriages end in divorce. Further, over 60% of Americans die without a will. Such realities present major estate planning problems for many families. How do you guarantee that your descendants, and only your descendants, receive your assets?
The short answer is that a talented estate planning attorney can create what is informally called a “Dynasty Trust.” This type of trust ensures that your assets stay in your bloodline. Here is how it works: Instead of leaving a child his inheritance outright, the inheritance is placed in a trust. The trust names your child both as beneficiary and trustee during his lifetime. As such, the child may always access the principal of the trust and use it for his/her benefit. Upon the child’s death, the trust assets are then distributed to your children or they may remain in trust for your grandchildren’s benefit. During the lifetime of the trust, the assets remain protected from creditors, divorce, and if is the trust is properly worded, the assets are not includable in the estate of the child at the child’s death. Planning your estate in this manner guarantees that your assets are protected from life events which could rob your family of the assets which you have worked so hard to secure.