Helping build generational wealth with a dynasty trust

Perhaps you own a family business that you hope will benefit your great-grandchildren and beyond. Or maybe you own a portfolio of investment real estate in a closely held entity that could generate a stable income stream for your descendants well into the future. If you have ever dreamed of creating a legacy for multiple generations— while helping minimize taxes and other factors that could deplete valuable assets over time — a dynasty trust could be worth considering.

A dynasty trust is an irrevocable trust meant to help protect your wealth and provide benefits for multiple generations of your family while potentially minimizing the impact of state, estate, and transfer taxes.

“These trusts can facilitate the continuation of family wealth and transition the assets across multiple generations,” explains Nancy Anderson, Senior Wealth Strategist with Wealth & Investment Management, Wells Fargo Clearing Services, LLC. “They can last indefinitely, depending on the state’s laws and the trust structure and as long as there is property in the trust. They also help protect valuable assets from federal estate transfer taxes while allowing them the potential to appreciate within the trust.”

Here’s what to know about these trusts — and why a dynasty trust might be worth considering.

A dynasty trust can be funded with a wide range of assets—from traditional investment portfolios to more specialized holdings such as real estate, family businesses, closely held business interests, and even oil and gas investments. In some cases, clients begin simply by contributing cash.

“Our high-net-worth clients often create numerous trusts, and a dynasty trust can be a great compliment to their estate plan to transition wealth beyond the second generation” says Anderson, “In my experience, dynasty trusts are usually funded with their most important and growing assets, and clients often use their wealth transfer tax exemptions to fund them.”

In 2026, the lifetime gift/estate tax exemption is $15 million per person or $30 million for a married couple.

One of the key advantages of a dynasty trust is the potential for assets within the trust to appreciate without being subject to additional wealth transfer taxes. Over time, this can allow a greater portion of your wealth to remain intact for future generations. “To help preserve and build wealth within the trust, it’s often most effective to contribute assets with strong growth potential and relatively low current transfer tax value,” says Kellan Clark, Senior Fiduciary Specialist with Wealth & Investment Management, Wells Fargo Bank, N.A.

While dynasty trusts can offer meaningful tax and legacy planning benefits, they also introduce a level of legal and financial complexity that deserves thoughtful consideration. Because these trusts are designed to last for generations, careful planning upfront is essential. “We want to make sure these trusts are built with as much flexibility as possible, given their long-term nature,” says Anderson.

Here are some features to help determine whether a dynasty trust may be right for you.

In the end, a dynasty trust can be thoughtfully tailored to reflect your goals—helping to preserve wealth, support future generations, and potentially minimize estate and generation-skipping transfer taxes. While the planning process requires careful consideration, the long-term benefits can be meaningful, creating a legacy your family may appreciate for years to come.

Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.

Wealth & Investment Management (WIM) offers financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Bank products and services are available through Wells Fargo Bank, N.A. Wells Fargo Trust is a part of WIM and offers services through Wells Fargo Bank, N.A. and Wells Fargo Delaware Trust Company, N.A.

Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice estate law in your state.