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Michael Bradley
Michael Bradley,
Category: Bankruptcy Law
Satisfied Customers: 1078
Experience:  Owner at The Protection Group LLC
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Is Maryland a Dynasty Trust state?

Customer Question

is Maryland a Dynasty Trust state ?
Submitted: 2 months ago.
Category: Bankruptcy Law
Expert:  Michael Bradley replied 2 months ago.

Long-term trusts have been used for ages, but until relatively recently they couldn’t last forever. The longer your dynasty trust lasts, the more your family will potentially save in transfer taxes. If your jurisdiction still adheres to the common-law rule against perpetuities (Texas still follows this rule), your dynasty trust can last 21 years beyond the death of the last beneficiary alive when the trust was created. Those states — including Alaska, Delaware, Maryland, South Dakota, Idaho and Wisconsin — that have abolished the rule against perpetuities allow dynasty trusts to continue indefinitely. Other states allow you to opt out of the rule against perpetuities. Still other states have extended the maximum duration a trust may exist. For example, Wyoming and Utah allow a trust to last for up to 1,000 years, while Florida permits a trust to last for up to 360 years. So, while a trust may last a very long time, it can be truly perpetual only when organized in a state that sets no limit on duration. Fortunately, no matter where you live, you can create a trust under another state’s law and not be restricted to the duration your home state imposes.

Expert:  Michael Bradley replied 2 months ago.

Long-term trusts have been used for ages, but until relatively recently they couldn’t last forever. The longer your dynasty trust lasts, the more your family will potentially save in transfer taxes. If your jurisdiction still adheres to the common-law rule against perpetuities (Texas still follows this rule), your dynasty trust can last 21 years beyond the death of the last beneficiary alive when the trust was created. Those states — including Alaska, Delaware, Maryland, South Dakota, Idaho and Wisconsin — that have abolished the rule against perpetuities allow dynasty trusts to continue indefinitely. Other states allow you to opt out of the rule against perpetuities. Still other states have extended the maximum duration a trust may exist. For example, Wyoming and Utah allow a trust to last for up to 1,000 years, while Florida permits a trust to last for up to 360 years. So, while a trust may last a very long time, it can be truly perpetual only when organized in a state that sets no limit on duration. Fortunately, no matter where you live, you can create a trust under another state’s law and not be restricted to the duration your home state imposes.