Dynasty Trust
Multi-generational wealth transfer using the generation-skipping transfer (GST) tax exemption.
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Overview & Purpose
A long-term irrevocable trust designed to hold wealth for multiple generations, often leveraging the GST tax exemption to transfer assets free of estate tax at each generational level.
Who May Consider It
- You want to provide for descendants across several generations.
- Your estate is large enough that generation-skipping transfer tax planning is relevant.
- May shelter appreciation on GST-exempt assets from estate tax at each generational level, depending on funding and applicable law.
- Can include spendthrift protections for descendants.
- Does NOT eliminate all taxes — GST exemption limits and state rules apply.
- Does NOT allow the grantor to retain control over distributions.
Important Trade-offs
- Perpetuities and GST rules vary by state; some states have abolished the rule against perpetuities for trusts.
Relevant Assets
States such as Delaware, South Dakota, Nevada, and Alaska permit long-duration or perpetual trusts.
Questions to Discuss with an Attorney
- Does my state allow perpetual or long-term dynasty trusts, and what GST exemption applies?
Related Documents
Sources & References
This article was prepared using publicly available legal and government sources. Laws change, and readers should verify current rules in their jurisdiction.
Reviewed for educational accuracy
Last reviewed: September 30, 2026 · Next scheduled review: March 2027
This article is educational information and is not legal advice. Laws vary by jurisdiction. No attorney has reviewed this material unless a named, licensed attorney is credited above.
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