In a post we wrote last month, we talked with our younger Melbourne readers about drafting an estate plan early because it can help them greatly when they get older. We stressed, however, that as new events change a person's life, so too should an estate plan. This is because you always want to make sure that your estate plan is as up-to-date as possible to avoid the legal pitfalls that can sometimes occur when you ignore your plan for too long.
Even if you read our March post and have started to update your estate plan, we'd like to point out that you don't have to halt your plans at your own generation. If you hadn't considered making plans for your children's children or even future generations down the road, you're not alone. For many people, this is an afterthought or considered something future generations will fix. But we'd like to point out to today's readers that they can do something now in order to ensure their financial legacy for years down the road.
Those here in Melbourne and across the state of Florida who want to ensure the integrity of their family fortune for generations to come can establish what is called a dynasty trust or generation-skipping trust. Unlike other trusts that typically pay out in increments to a beneficiary over their lifetime, a multigenerational trust like the dynasty trust can make sure that your familial beneficiaries will have access to your assets for decades to come.
Like with any estate planning maneuver though, establishing a dynasty trust should not be done without the aid of a skilled estate planning attorney. State laws concerning this type of legal document are complex and might be difficult to understand for the average person. This could lead to mistakes that could jeopardize the legitimacy of the trust, which is an issue that can be avoided if you speak to an experienced lawyer.
Source: The Wall Street Journal, "Why Estate Planning for a Distant Future Requires Flexibility," Anna Prior, May 4, 2015