A dynasty trust is a type of irrevocable trust designed to provide for multiple generations of a family. It is structured to extend for several generations, potentially in perpetuity, and allows the preservation and growth of family wealth while minimizing estate taxes. Dynasty trusts are also known as perpetual trusts or generation-skipping trusts.

Key features of a dynasty trust include:

1. **Irrevocability:** Like many trusts designed for wealth preservation, a dynasty trust is typically irrevocable. Once the assets are transferred to the trust, the grantor relinquishes control over them.

2. **Long Duration:** Unlike some trusts that terminate after a specified period or when certain conditions are met, a dynasty trust is intended to last for an extended period, often for the duration of multiple generations.

3. **Wealth Transfer and Estate Tax Planning:** Dynasty trusts are particularly useful for high-net-worth individuals who want to transfer a significant amount of wealth to future generations while minimizing estate taxes. By using the generation-skipping transfer (GST) tax exemption, assets can pass from one generation to the next without incurring additional estate taxes.

4. **Protection from Creditors and Divorce:** Assets held in a dynasty trust are generally protected from the creditors of the trust beneficiaries, providing a level of asset protection. Additionally, the trust can be structured to protect the assets in the event of a beneficiary’s divorce, ensuring that the family wealth remains within the family.

5. **Distribution Provisions:** The trust document outlines the distribution provisions, specifying how and when trust assets are distributed to beneficiaries. The grantor can structure the trust to provide for the needs of current beneficiaries while preserving assets for future generations.

6. **Professional Trustee:** To ensure the longevity of the trust, many dynasty trusts involve a professional trustee or a corporate trustee. This trustee can manage the trust assets and make impartial decisions that align with the trust’s purpose.

7. **State Laws:** The availability and terms of dynasty trusts vary by jurisdiction, as trust laws are established at the state level in the United States. Some states have specific legislation supporting the creation of perpetual or long-term trusts.

It’s important to note that the tax and legal implications of dynasty trusts can be complex, and individuals considering the establishment of such trusts should seek the advice of legal and financial professionals with expertise in estate planning and trust law. Additionally, the specific rules governing dynasty trusts may vary depending on the jurisdiction and applicable laws.