When families begin thinking seriously about long-term wealth planning, the conversation often starts with structures trusts, entities, tax strategies. But the most important decision comes much earlier and is far more philosophical:
Is the goal to eventually distribute wealth to individuals or to preserve family capital indefinitely?
These two approaches represent fundamentally different views of ownership, responsibility, and legacy. Almost every sophisticated trust structure falls somewhere along this spectrum, most clearly embodied in two dominant models: the Inheritance / Succession Trust and the Dynasty Trust.
The inheritance or succession trust reflects a philosophy most people instinctively understand. Wealth is meant to belong to family members, just not all at once, and not too early. The trust acts as a temporary safeguard, holding assets until beneficiaries reach certain ages or demonstrate maturity, responsibility, and alignment with family values.
This model assumes that ownership is the end goal. Controls and incentives are there to guide behavior, not to permanently restrict access. Once the conditions are met, beneficiaries receive assets outright and are free to make their own decisions, for better or worse.
The dynasty trust, by contrast, starts from a very different premise. Here, the wealth itself is viewed as intergenerational family capital, not personal property. The objective is not eventual distribution, but long-term preservation, growth, and protection. Assets are meant to stay inside the trust for generations, sometimes indefinitely, while beneficiaries receive support rather than ownership.
In this model, family members are not heirs in the traditional sense — they are stewards. Their role is to benefit from the capital, contribute to its growth or purpose, and pass it forward intact.
Neither philosophy is inherently better. Each reflects different family cultures, risk tolerances, and definitions of success. Problems arise only when families adopt structures without first clarifying which worldview they are actually trying to implement.
Before drafting documents, the real question to answer is simple, but profound:
Do we want our wealth to end with us, or continue beyond us?