Mark Dayton reportedly has a fair chunk of his fortune tied up in a “dynasty” trust in South Dakota.
Why?
Because SoDak is one of 23 states that allow these trusts.
Dynasty trusts push that generation-skipping tax exemption to the max, putting the exempted amount [$5 million for an individual, $10 million for a married couple, which can be stretched further using discounts, life insurance policies and other big-dollar tax-lawyer dodges – Ed.] beyond the reach of estate taxes for the life of the trust. That, in turn, means the heirs don’t have to “spend” their own exemptions on those assets. These trusts are now allowed in 23 states and the District of Columbia (see table), to the delight of companies that charge fees to manage them. Taxpayers don’t have to live in a state to put a trust there.
Mark Dayton – and the other very rich, who get to shelter their fortunes using these trusts, unlike “the rich” that Dayton proposes to extract an almost 11-percent state income tax – may be losing some of this advantage, though, thanks to – the Obama Adminsitration:
To enable these trusts, most of the states allowing them had to get rid of an old common-law principle called the “rule against perpetuities,” which allowed trusts to exist only for about 90 years. The Obama administration proposal would reinstate this old principle in a way by removing the federal tax exemption after 90 years. So the trust can go on indefinitely, but the exemption can’t. (The pass applies to taxes on wealth transfers, of course; annual income taxes are always due.)
So will Mark Dayton be happy to pay for a better USA?
(Via Joe Doakes and Tax Prof Blog)
T to A for life, then, upon A’s death to the heirs of A’s body, per stirpes, except for those heirs who are alcoholic or are named in Time Magazine as one of America’s worst senators; the non-worst senator heirs taking the worst-senator’s share equally per capita at each generation.
Please show your work.
Actually, a dynasty trust would have to consist of a chain of successive life estates in fee tail.
Blah, it’s been a while.
Blah, it’s been a while.
I was going to say the same thing.
Brave Sir Mark, Champion of the People may already be planning a “working vacation” in the Caymans.
I think that Dayton would endorse any tax regime that left him wealthy with respect to other citizens. “Elite” is a relative, not an absolute, measure.
Once again, why does Mad Mark Dayton have millions of dollars over in South Dakota (or any other state than his ‘beloved’ Minnesota)?
Answer: He doesn’t want to PAY HIS FAIR SHARE OF TAXES!!!!!
(Ok, lil Doggie…come ‘n defend him. We know you will.)
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