Written by Sagar Jariwala, JD, LLM

A trust instrument may give a trustee different levels of powers over distributions. A trustee can have full discretion over distributions, meaning that the trustee can decide if distributions should be made, when distributions should be made, and what amount of distributions should be made to a beneficiary. Alternatively, a trust instrument can require a trustee to make distributions. For example, the trust may require distributions of all income at least annually or of required minimum distributions received from a retirement account, or the trust may grant a beneficiary a withdrawal right that the beneficiary exercises.

From the tax treatment of a forfeited individual retirement account (IRA) to a US Supreme Court decision affecting Veterans’ disability claims and FinCEN’s issuance of an interim final rule limiting enforcement of the Corporate Transparency Act (CTA), we have recently seen significant developments in estate planning, elder and special needs law, and business law.

Written by Jayna M. Voss, JD

High-net-wealth individuals are turning to dynasty trusts, not only to avoid federal estate taxes but also to protect assets from general creditors and spendthrift heirs. Even those who do not have a taxable estate should consider a dynasty trust to preserve and grow wealth while ensuring that their loved ones are protected. 

Many people are aware of the advantages of conventional trusts and incorporate them into their estate planning, but they often design the trusts so that assets pass outright to their children when those children attain certain ages or milestones. When a conventional trust distributes assets outright to the beneficiary, the distributed assets are includible in the beneficiary’s estate and possibly subject to estate tax when the beneficiary dies. If, after an outright distribution, the beneficiary goes through a divorce or has other creditors, those assets could be at risk. Family assets that are distributed to beneficiaries with no restrictions are often depleted by the third generation due to mismanagement or spendthrift heirs.