Perpetual (Dynasty) Trusts: A Long-Range Tool for Protecting Family Wealth
Perpetual trusts—often called dynasty trusts or qualified perpetual trusts—are designed to move assets to your heirs over multiple generations. At FMD Wealth Advisors, we help families build plans meant to last, so your intentions and assets can endure.
What is a perpetual trust?
A perpetual trust is an irrevocable arrangement created to hold assets for your beneficiaries across successive generations. Unlike many trusts that end after a set term or when a beneficiary dies, a perpetual trust is structured to continue—potentially until the last named beneficiary has passed—so the assets can remain protected and purpose-driven over very long time frames.
The appeal is straightforward: by placing assets in a dynasty-style structure, you can promote growth, avoid probate on those assets, and add layers of protection from certain taxes and creditor claims—so more of your wealth is available to the people you care about, when they need it.
How these trusts are set up and run
Creating a perpetual trust is a deliberate but manageable process:
Form the trust: You work with an estate-planning attorney to draft the document and spell out your goals. Once signed and funded, it’s irrevocable, so choices about assets and terms should be made carefully.
Fund the trust: You can transfer cash, investments, real estate, or business interests. After transfer, those assets are generally outside your taxable estate.
Name the players: You choose the beneficiaries and appoint a trustee to manage investments and carry out distributions according to your instructions.
Define distribution rules: You set how and when beneficiaries may receive benefits—for example, periodic income distributions or specific uses such as health, education, or maintenance—while preserving principal for future generations.
Clear, durable distribution standards help the trust stay effective and keep resources available for decades to come.
Why families use perpetual trusts
Multi-generation wealth preservation: Assets can compound over time within the trust, with potential reductions in estate or generation-skipping transfer exposure.
Skip probate: Property held in the trust does not go through the public probate process, supporting privacy and efficiency.
Shielding from claims: Trust assets are often better insulated from certain creditor actions and divorce-related claims, helping protect family finances.
Customized guidance: You can tailor how funds are used—prioritizing essentials like education or healthcare, or pacing access to encourage responsible stewardship.
Key considerations before you proceed
Irrevocability: Funding is permanent. Be sure about which assets you’ll contribute and the terms you want to lock in.
Long-term governance: Choose a trustee you trust, outline investment principles, and set practical distribution guidelines that can stand the test of time.
Professional advice: Work closely with experienced estate attorneys and tax professionals to align the trust with your broader plan and comply with applicable laws.
Is a perpetual trust a good fit?
If your goals include preserving wealth beyond your lifetime, protecting heirs, and guiding how resources are used, a perpetual (dynasty) trust may be worth serious consideration. These structures can help families with long-range objectives pass on assets—and values—with clarity and control.
Disclosures: FMD Wealth Advisors LLC (“FMD Wealth Advisors”) is a Registered Investment Adviser.
This material is for general information only and is not individualized legal or tax advice. Consult your attorney and CPA regarding legal and tax matters specific to your circumstances. This content is intended to provide general information about FMD Wealth Advisors. It is not intended to offer or deliver investment advice in any way. Information regarding investment services is provided solely to gain an understanding of our investment philosophy, our strategies and to be able to contact us for further information.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
Past performance is no guarantee of future returns.
Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable. Additional Important Disclosures may be found in the FMD Wealth Advisors Form ADV Part 2A. For a copy, please Click here.