Dynasty estate planning helps families have a positive relationship with money

By Richard Bloomfield

For the Deseret News

Published: Tuesday, Feb. 12 2013 10:04 a.m. MST

From these proceeds, he and his wife will receive a significant taxable payment each year to fund their retirement. The remainder, after both of them are gone, will fund a family donor advised charitable fund that their daughters will direct for charitable and social causes. Wealth, otherwise lost to taxes, will fund satisfying endeavors for generations.

The financial power of the dynasty trust was dramatically portrayed in a recent study. Consider $1 million gifted directly to a child, which grew at 6 percent with modest distributions. The money was passed to the child who subsequently passed it to the third generation, all with no planning. After estate taxes, the total value grew to $7.6 million.

The same $1 million gifted to a dynasty trust and kept in the dynasty trust under the same assumptions and for the same number of generations would grow to $83.8 million. The only difference was that the dynasty trust paid no estate tax on the money or its growth.

Not only is there financial clout in dynasty planning, but there is emotional, social and spiritual influence as families thoughtfully pass on the legacy of family wealth and values.

Rich Bloomfield, CPA, is an author, co-host of the business radio show “What About Wealth” and the managing member of Bloomfield CFO, PLLC, a CPA firm specializing in gift and estate planning and asset protection planning.

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