Dynasty Trust Law and Legal Definition
Dynasty trusts are trusts that are statutorily authorized to continue for a very long time. It is funded with the amount that is permanently exempt from generation-skipping tax and is usually designed to last more than two generations. Dynasty trusts allow the creator to pass wealth from generation to generation without the burden of transfer taxes, including estate and gift tax and the generation skipping transfer tax (GSTT). The trust is irrevocable and, once funded, the grantor no longer has control of the assets and will not be able to reach the assets or amend the trust terms.
In the U.S almost half the states allow dynasty trusts, despite their potential for lasting more than 100 years. Dynasty trusts are also called GST supertrust.