San Jose Dynasty Trusts Attorney

Assisting Clients with Trust Administration, Legacy Planning, and Complex Tax Issues in California

Tax planning is essential to every estate plan, especially for individuals and families with large amounts of wealth. Estate and gift taxes can significantly reduce the size of your estate, but with the right estate planning strategies, you can work to protect your hard-earned assets and minimize the burdens of taxation.

One preferred way of protecting estate property and the future of your loved ones is to create different types of trusts, including dynasty trusts, charitable trusts, revocable trusts, or special needs trusts. Establishing a valid trust often requires the guidance of experienced estate planning attorneys. At our San Jose law office, our legal team provides dedicated services to our clients for the benefit of their family members, including those yet to be born, like future grandchildren.

Our law firm wants to build a lifetime attorney-client relationship with you and your loved ones. We will address all your estate planning goals throughout your life and then defend your legacy and the interests of your beneficiaries after death.

To learn more about estate and probate law, please contact our California law firm to schedule your initial consultation with our legal staff today.

What Are Dynasty Trusts?

A dynasty trust is a long-term trust used to pass on family wealth to future generations. Dynasty trusts are not just for the wealthy but provide protection for most families. With this type of trust, the assets can only go to the proper beneficiaries. The trust provides powerful protection against creditors, often preventing loss to a lawsuit against the beneficiary.

Trust assets do not belong to the beneficiary and cannot mix with the assets of a spouse or partner. In the unfortunate event of a breakup or divorce, the trust assets are not lost to a beneficiary’s spouse or partner.

Perhaps most powerfully, at a beneficiary’s death, the trust assets pass on to the beneficiary’s children without estate tax, preserving the family’s legacy for generations.

Dynasty trusts transfer wealth through multiple generations without incurring transfer taxes. If you believe this type of trust may be beneficial to you and your family, reach out to an experienced estate planning attorney at our law firm to schedule a case consultation.

What is the Difference Between a Dynasty Trust and a Legacy Trust?

Dynasty trusts differ from standard trusts in many ways, but the key difference is in the duration. Whereas a standard trust typically ends at a specific life event, dynasty trusts are designed to exist for many generations and potentially indefinitely. Dynasty trusts also provide more asset protection and can save you money in taxation.

There is no difference between dynasty trusts and legacy trusts. These terms are used interchangeably to refer to the same type of estate planning tool created to secure the funds for future generations of someone’s family.

Are Dynasty Trusts Only for the Wealthy?

Several misunderstandings and misconceptions about dynasty trusts in California may lead to missed opportunities in estate plans.

Perhaps the most common misconception is that only high-net-worth individuals can take advantage of dynasty trusts. While it is true that dynasty trusts are very beneficial to wealthy individuals, they can also be advantageous to individuals and families with modest estates looking to ensure long-term asset protection through estate planning.

Please contact our San Jose law firm to speak with the attorney to learn more about dynasty trusts and whether they would be useful in your situation.

Who Can Benefit from a Dynasty Trust in California?

The key characteristics of dynasty trusts include longevity, asset protection, and control, as well as the minimization of estate taxes. These types of trusts can benefit several different types of individuals or families.

Dynasty trusts are favored by individuals with significant assets who wish to transfer their wealth to their children and grandchildren. However, this type of trust can also benefit families simply looking after their legacies and future generations, even great-grandchildren.

This unique type of estate planning method can assist families concerned about their taxable estate, creator claims, and legal issues involving their beneficiaries, including the potential of divorce or irresponsible spending habits.

How Do Dynasty Trusts Work in California?

Dynasty trust laws are different in each state. A dynasty trust in California is going to look and work differently from one in any other state. A dynasty trust in California can last for more than 90 years and often has one trustee. A trust in other states, with different laws and practices, may last longer and require two or more trustees.

There are five essential steps to setting up a California dynasty trust. These include the following:

Consult with experienced estate planning lawyers
Designate trustees and beneficiaries (and consider successor trustees and beneficiaries)
Review and determine which assets to include in the trust
Consider how trust funds will be distributed to beneficiaries
Fund the trust and plan for trust administration

Selecting the proper trustee for your dynasty trust is crucial. While some entrust these duties to a family member or friend, others seek the services of professional trustees or trust management companies.

Working with a knowledgeable attorney is also essential, especially when it comes to tax considerations like estate, gift, and inheritance taxes. Finding a skilled trust lawyer in your area makes setting up a dynasty trust easier. Keyes Law Group, PC, serves many communities in Santa Clara County, including Mountain View, Palo Alto, and Santa Clara. We can help you design dynasty trusts that work best for your family.

What Are the Advantages and Disadvantages of Dynasty Trusts?

Every form of estate planning tool has pros and cons. Not all methods are beneficial to everyone, and it is often important to seek professional legal counsel from estate planning lawyers for legal guidance.

The benefits of adding dynasty trusts to your estate plan include the following:

Dynasty trusts help avoid gift tax, estate tax, and more. Once assets are placed into an irrevocable dynasty trust, they are permanently removed from your estate. You may only be required to pay a gift tax once the asset is placed in the trust. Additionally, if you expect the value of estate assets to increase significantly, you can help prevent tax burdens for your beneficiaries
Assets are shielded from potential lawsuits, divorce settlements, and creditor claims that may occur in the future
Dynasty trusts can help facilitate efficient business succession planning for family-owned businesses looking to future generations
Your beneficiaries must meet certain specified criteria to gain access to the trust and receive any single payment
Dynasty trusts provide for all of your descendants, including grandchildren and great-grandchildren who’ve not been born yet. If you directly bequeath assets to someone much younger than yourself, you could face a 40% tax rate in accordance with the estate and gift tax threshold. Assets put into dynasty trusts will not be subject to these taxes
When you establish the dynasty trust, you set the terms for how trust assets will be administered. This flexibility allows you to prevent funds from being misused or wasted by beneficiaries

Before creating a trust, though, it’s important to know some of the potential downsides.

Potential drawbacks of dynasty trusts in California include the following:

After you establish the trust, it is irrevocable. Irrevocable trusts cannot be easily altered to change trustees, beneficiaries, or edit terms. If the trust creator changes their mind after the trust goes into effect, there is no simple method for altering the terms or removing assets
Once the trust vests, it can create income tax and gains tax obligations for your beneficiaries. Additionally, conflicts may arise between beneficiaries if there are no specific directions on how to divide trust assets
If financial goals change for your family in the future, it may be difficult for them to access the wealth protected by the dynasty trust. Once the trust is active, surviving beneficiaries have very little control over how assets are distributed

How Can Our Law Firm Assist You with Your Estate Planning Needs?

A lawyer can recommend the best terms for the trust based on your concerns and circumstances. One dynasty trust can be very flexible for a beneficiary, while another dynasty trust can establish strict controls and limits for a different beneficiary. This can be important when a beneficiary is immature or cannot control their spending habits.

An experienced lawyer can also advise you on choosing the right trustee. A good trustee can often avoid conflict with a resistant or unmanageable beneficiary and maintain family relationships.

Our estate planning lawyer is well-versed in the applicable rules and laws for dynasty trusts in California. As your legal representative, the attorney will explore all of your legal options to ensure that you have developed the surest estate planning strategy to meet your needs and look after future generations.

Schedule an In-Depth Case Evaluation with an Experienced California Estate Planning Lawyer Today

California dynasty trusts have several advantages for individuals with estate planning goals that extend across multiple generations. With a properly created dynasty trust, you can help minimize estate taxes and protect assets for your beneficiaries for years to come.

Establishing a dynasty trust or any other type of estate planning tool can be complex, especially without professional legal assistance. Contact our San Jose law office today to discuss your intentions with our compassionate and highly skilled estate planning lawyer.

To learn more about our legal services and how we may assist you and your family members, please contact us at 408-443-2397.