Dynasty Trust

Traditional trusts were often required by law to terminate after a set period tied to the lives of identifiable people. Dynasty trusts are structured to last far longer, in some jurisdictions, potentially indefinitely. The goal is to keep a pool of assets compounding inside the trust, protected from estate taxes and creditors, as it passes from one generation to the next. This multigenerational ambition is one reason why family offices exist in the first place.

Imagine a three-generation family with two operating businesses. A dynasty trust might hold interests in those businesses and a diversified investment portfolio, with trustees instructed to provide for education, housing, and entrepreneurial ventures across grandchildren and great-grandchildren. The trust essentially becomes a private institution, one that needs its own governance, its own investment policy statement, and ongoing situs planning to remain effective.

A common confusion is treating a dynasty trust as simply a very long revocable trust. It is not — it is an irrevocable trust, meaning the grantor gives up control permanently. The jurisdiction chosen to govern the trust matters enormously, because rules on trust duration, taxes, and creditor protection differ widely. Families must work with qualified attorneys who specialize in trust law before establishing a dynasty trust structure.