A married couple living in the United States has accumulated some wealth that they would like to use to start a trust - for the purpose of creating a ‘safety net’ for their children, grandchildren, ‘great-grandchildren’, and future generations.

By ‘safety net’, I mean that the couple wants to ensure that these funds will not be used frivolously by their descendants – e.g. to enhance their lifestyles, to buy luxury cars or big houses, for vacations, etc. Rather, the couple intends for these funds to only be used in critical situations or emergencies, and only in cases where a descendant facing such a challenge is unable to bear the costs themselves. For example, funds might be disbursed from the trust to a descendant to pay for medical expenses, or to get out of a hostile region of the world affected by social/political instability, or other dire situations. But, only if the descendant is unable to bear these costs themselves. [Education might also be an acceptable use of the funds – but again, only if the descendant and/or their family cannot afford to pay for education themselves.]

Being that disbursements from the trust would only be made in these special cases, there likely would be very few disbursements. Therefore, it is likely that many of the couple’s descendants would never receive a disbursement. Moreover, it’s quite possible that the income from the invested assets in the trust will exceed the disbursements over time – meaning that the value of the assets in the trust may continue to grow indefinitely, and the trust could very well stay in the family perpetually.

Is there such a thing as this sort of ‘safety net trust’? Is it a problem to have a trust where the income from the invested assets is likely to exceed the disbursements, and the trust might live on perpetually? If such a trust exists, what is the name for this type of trust, and how would one go about starting the process of setting one up? Who would administer such a trust, particularly if the trust lives on for many generations after the couple (and their children and grandchildren) have passed on? And how would the couple go about spelling out their wishes with regard to conditions for disbursements (especially being that some of these decisions might be somewhat subjective, and some situations might be unforeseeable), and ensuring that future administrators of the trust honor these wishes?

  • 3
    This is a legal question. You should probably talk to a lawyer. In order to get any suggestions here, please mention the jurisdictions involved (Country, state, etc).
    – littleadv
    Commented May 12, 2022 at 20:39
  • What you describe sounds very much like an insurance policy.
    – mustaccio
    Commented May 12, 2022 at 20:51
  • @littleadv, Thanks for the suggestion. I've edited the question to add that they live in the United States.
    – weaver
    Commented May 12, 2022 at 21:42
  • 2
    State matters - each state is different.
    – Joe
    Commented May 12, 2022 at 21:43
  • You can create a trust that disburses funds in virtually any way that you want under whatever conditions you want - the executor of the trust would be bound by the terms of the trust. I don't know that there's a name for what you want but you can call it whatever you like. That's a long way of saying I agree with littleadv - talk to an estate planning lawyer :)
    – D Stanley
    Commented May 12, 2022 at 21:44

2 Answers 2


Fundamentally you're describing a "dynasty trust", or a perpetual trust, which has a particular purpose. Trusts in general work this way - the trustees disburse money based on the requirements laid out in the trust's establishing documents. It's quite common to have "education" trusts, for example, which exist for the primary purpose of paying for the college/etc. costs of the beneficiaries. What you're describing isn't all that different.

These kinds of trusts are irrevocable, and the beneficiaries are unable to change the terms normally. The important detail here to consider is that you don't know what the future will bring - so the more strict the terms of the trust, the less flexibility the future generations will have to change with the times. You certainly could delineate all of the possible things your beneficiaries could do with the money - but that comes with the cost of them not being able to access money without fulfilling those needs, and if in 100 or 200 years there have been major changes in how the world works, that could be a problem! Ultimately, the trustees will have to have some discretion in deciding what qualifies as a need; there's no way you could adequately specify the details in the trust's establishing documents to avoid any discretion.

One approach some use is to have trustees be family members who are no longer beneficiaries. For example, you could have a rule that a beneficiary may elect to forgo benefits to become a trustee, or have it happen at some particular age. Then, empower these trustees to make the decisions that are best for the time.

Whatever you do, talk to a lawyer who is an expert in perpetual trusts, and probably more than one. It's very important to make these decisions correctly, because if you don't, the trust will end up just funding a bunch of lawsuits... and make sure your children (or whomever the beneficiaries are) understand your reasons for making the choices you do.

  • 1
    It is very likely that the trust will end up funding a bunch of lawsuits no matter what the OP does, and it is also likely that it will not in fact end up being truly perpetual. Perpetual trusts have been outlawed centuries ago for a reason, and their recent comeback may be very short-lived.
    – littleadv
    Commented May 13, 2022 at 0:20
  • Nothing I disagree with there. :)
    – Joe
    Commented May 13, 2022 at 0:21
  • "that a beneficiary may elect to forgo benefits to become a trustee" - "I elect to become a trustee. I now elect to give all the money to my brother John. Hey John, can I have half?" Commented May 13, 2022 at 8:33
  • Thank you, @Joe. This was helpful.
    – weaver
    Commented May 16, 2022 at 20:00

You're talking about what is called a "Perpetual Trust" or "Dynasty Trust". These are illegal in many of the States in the US, and in many other countries. In some States they're in fact legal, but there are some challenges to that. You can find a nice write up about what it is and where it is legal in this article and in that article.

You'll want to discuss this with an estate attorney. Perpetual Trusts are irrevocable trusts, they're expensive to set up and manage, and it is likely that you're not rich enough to need or want them. In the unlikely even that you are in fact rich enough - your CPA and the personal attorney can find a professional to advise you on the details.

  • Thank you @littleadv for the helpful info and links. If I could accept two answers, I would.
    – weaver
    Commented May 16, 2022 at 20:02

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