Drawing up a will is an essential step for South Dakota residents who wish to protect assets for their family. However, depending on your particular needs, a will alone may not be enough. At The Krause Law Firm, P.C., we often assist clients with estate planning, including wills, advance directives and trusts.
According to Anderson Advisors, a dynasty trust can protect your assets from a variety of situations while passing your wealth to your descendants. Also known as a family trust, it differs from other estate planning tools as it lasts longer. This generation-skipping trust can remain in place for several decades. You can also limit how your descendants access the assets it contains.
Dynasty trusts can help you, and your heirs save on taxes. As it is a type of irrevocable trust, once you designate assets, they can avoid taxable events. Over time this allows for extensive compounding power, especially if you utilize tax-free investments. Due to the Tax Cuts and Jobs Act, you may also take advantage of the significantly higher tax exemptions for the next few years.
Family trusts allow you to determine how to release assets and in what circumstances. For example, you may want funds paid to a descendant after a special birthday or if they complete milestones such as graduating college or get married. You can choose to parcel out assets over several decades or payout completely. It can also prevent spouses of future beneficiaries from claiming the assets within the trust in a divorce.
Trusts can help protect your assets and enable you to pass them down through several generations. A professional can help you decide whether one or several trusts meet your needs best. Visit our webpage for more information on this topic.