Dynasty Trust

This type of trust can also be known as a "Perpetual trust". It is a trust formed in a state (or foreign jurisdiction) that permits a trust to last forever (or certainly for a very long time period). Technically, the dynasty trusts is to continue as long as feasible without violating the state's rule against perpetuities (the law that governs how long a trust can last). Typically such a trust is formed by a person (grantor) during lifetime (inter-vivos) or at death (testamentary). Generally such a trust is funded up to the maximum amount that can be given or bequeathed without triggering the generation skipping transfer (GST) tax ($3.5 million in 2009, but watch the $1 million gift exclusion).