Legacy Planning

With the OBBBA permanently setting the estate tax exemption at $15M (inflation-adjusted), families have unprecedented capacity for multi-generational transfers. A married couple can shelter $30M from federal transfer taxes immediately, and strategic use of dynasty trusts can extend that shelter indefinitely. The key principle: assets placed in a properly structured GST-exempt dynasty trust are never again subject to estate, gift, or generation-skipping transfer taxes — no matter how many generations benefit from the trust.

• $15M individual / $30M couple GST exemption can shelter wealth for centuries
• Dynasty trust assets are never again subject to transfer taxes
• Grantor trust treatment means income tax payments further reduce taxable estate
• Trust can include incentive provisions to encourage family values and productivity
• Professional trustee selection critical for long-duration trusts

Selecting the right situs (legal home) for a dynasty trust is one of the most consequential decisions. Key factors include: duration limits (Rule Against Perpetuities), state income tax on trust income, asset protection strength, trust modification flexibility, and quality of trust courts. Top jurisdictions for 2026: South Dakota leads with no Rule Against Perpetuities, no state income tax, strong asset protection (2-year seasoning), and a specialized trust court. Nevada offers 365-year duration, no state income tax, and strong privacy. Delaware provides perpetual duration and the highly regarded Court of Chancery.

• South Dakota: perpetual, no income tax, 2-year asset protection, trust court
• Nevada: 365-year, no income tax, strong spendthrift protections
• Alaska: 1,000-year, no income tax, self-settled trust protection
• Delaware: perpetual, Court of Chancery, directed trust statute
• Wyoming: 1,000-year, no income tax, low-cost administration
• New Hampshire: perpetual, no income tax on trust distributions to out-of-state beneficiaries

For families with significant wealth ($100M+), a Private Trust Company allows the family to serve as its own trustee while maintaining the legal benefits of having an independent corporate trustee. PTCs are typically formed in trust-friendly jurisdictions (SD, NV, WY, NH) and can serve as trustee for all family trusts. PTCs provide family control over investment decisions, distribution timing, and trust administration without the costs and constraints of institutional trustees. They can also serve as a vehicle for family governance education.

• Best for families with $100M+ in trust assets across multiple trusts
• Family maintains investment and distribution control
• Licensed or unregulated depending on jurisdiction
• South Dakota, Nevada, and Wyoming are leading PTC jurisdictions
• Can include non-family advisory board members for independence
• Annual compliance and governance requirements apply

Studies consistently show that wealth transfer failures are overwhelmingly caused by family communication breakdowns and lack of preparation — not tax or legal issues. Effective legacy planning includes family governance structures: regular family meetings, a family mission statement, education programs for rising generations, and clear succession planning. Trust provisions can include incentive distributions tied to education, career milestones, community service, or other family values. Discretionary distribution standards give trustees flexibility while family governance documents provide guidance.

• 70% of wealth transfers fail due to family issues, not legal/tax problems
• Family mission statements align multi-generational goals
• Incentive trust provisions can encourage education, philanthropy, and work ethic
• Regular family meetings build communication and shared governance skills
• Rising generation education programs prepare heirs for wealth stewardship
• Family offices or PTCs can institutionalize governance structures