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Asset Protection
Planning
Advantages/Disadvantages of Dynasty Trust.
Understanding the basic factors
concerning your options is important. The information listed below should
give you a clear picture of what you can expect in terms of benefits.
What is a Dynasty Trust?
- A long-term Trust.
- It is irrevocable.
- Provides ownership flexibility.
- Provides asset protection.
- Provides income and the transfer of tax savings.
What are the Tax Advantages?
- Eliminates or reduces transfer taxes for successive generations.
- Locks in annual exclusion gifting*.
- Locks in Unified Credit*.
- Locks in GST exemption*.
- Reduces income taxes.
* Congress could later reduce or eliminate current
credits, exclusions, and exemptions
What are the Non Tax Advantages?
- Provides beneficiary use of property.
- House
- Vehicles
- Loans
- Down Payments
- Assets protected from imprudent investments.
- Assets protected from creditor claims.
- Assets are protected from spousal divorce claims.
- Provides for incentive distributions
|
Estate Tax Chart |
| Year |
Exclusion Amount |
Top Margin Rate |
|
2003 |
$1,000,000 |
49% |
|
2004 |
$1,500,000 |
49% |
|
2005 |
$1,500,000 |
49% |
|
2006 |
$2,000,000 |
45% |
|
2007 and 2008 |
$2,000,000 |
45% |
|
2009 |
$3,500,000 |
45% |
| 2010 |
Unlimited |
N/A |
| 2011 and thereafter |
$1,000,000 |
55% (or 60%) |
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