By Benjamin Trujillo and Elizabeth Sheehan
For most ultra-high net worth (UHNW) families, the question isn’t whether or not to have trusts, but if the ones they have are actually working together. Because different trusts accomplish different goals, UHNW families often have more than one. The key in building a true trust strategy lies in the mix. Assemble the wrong one, and you risk structures that work against each other, creating tax exposure you thought you’d eliminated, governance friction you didn’t anticipate, or gaps in protection that only surface when it’s too late to easily fix them. The right mix is a coordinated set of tools that work in conjunction with each other to protect and transfer wealth on your family’s terms. What follows is a framework for understanding which structures exist, why families use them, and how to think about putting them together intentionally.
Why UHNW families tend to use multiple trust structures
A single trust rarely accomplishes everything an UHNW family needs, and the family’s goals that matter most don’t always point in the same direction. A family prioritizing estate tax reduction may opt for different structures than one whose primary concern is asset protection or privacy. Understanding which goals to prioritize, and in what order, is often one of the most important planning decisions. Advisors help families work through that hierarchy before deciding which structures belong in the mix.
One of the most common reasons families establish a trust is to mitigate estate tax across generations. The approach is straightforward: move assets out of the taxable estate, allow them to grow outside of it, and reduce the estate tax burden on the family over time.
Another goal families often have is privacy. Unlike wills, which can become public records in certain states, the terms of the trust remain private. This can be a meaningful distinction for families who prefer to keep their wealth and intentions out of the public eye.
The other advantage is asset protection. A well-constructed trust can protect assets from the claims of creditors, divorce proceedings, or other legal challenges in ways that outright ownership cannot. Trusts can also protect assets from beneficiaries themselves — structuring distributions around age, milestones, or demonstrated readiness ensures that wealth transfers on the family’s terms, not simply by default when a beneficiary comes of age. Importantly, these protections don’t have to come at the expense of beneficiary autonomy. A well-designed trust can pace access to wealth while still giving beneficiaries meaningful control over time.
And for families with members living across states or countries, multi-jurisdiction planning may inform which state laws apply to a given trust, which can help navigate the potential for significant tax implications.
No single trust addresses all of these at once. Advisors can help families select the trust structures that align with their goals now and revisit that mix as needs may change over time.
The core trust structures
There are several trust structures that serve as the foundation for most UHNW estate plans. The table below outlines how each works and why families may implement them. Keep in mind, some trusts can fall under multiple types. For instance, SLATs are usually also grantor trusts.
| Type of Trust | How It Works | Why Families Use It |
| Grantor Trust | In this type of trust, the individual and the trust are treated as one entity for tax purposes. The individual pays the income tax the trust owes. | The tax payment reduces the taxable estate, creating a double benefit. Because high tax rates start at a low threshold for trusts, allowing the individual to pay the tax keeps more money in the trust to grow. |
| SLAT (Spousal Lifetime Access Trust) | An irrevocable trust between spouses that removes assets from the taxable estate while allowing the beneficiary to receive distributions. | Allows one spouse to continue to benefit from the assets while still allowing growth of the assets outside of the estate. |
| Dynasty Trust | A type of irrevocable trust designed to preserve and transfer wealth across multiple generations, structured to avoid federal gift, estate and generation-skipping transfer taxes. | Assets are protected from creditors, lawsuits, and divorce because beneficiaries do not own the assets directly. Because there is no time limit on the trust in many states, assets can compound and provide or descendants across generations. |
| Asset Protection Trust | An irrevocable trust that relinquishes control by the grantor to an independent trustee, which keeps the assets out of reach from creditors. | This trust structure provides asset protection against creditor claims, lawsuits, and inheritance disputes. |
Common misconceptions about trusts
Even in families with a trust or multiple trusts in place, common misconceptions can still persist with the potential to create unintended problems down the road.
- “Trusts replace family governance.”
Trusts do not replace family governance, and in some cases, a poorly structured one can make family dynamics worse. A common example is assuming that children will cohesively serve as trustees of a trust together. This arrangement puts siblings in a position to make decisions about the other’s money and vice versa, which is often a recipe for serious conflict.
- “Beneficiaries can’t be their own trustees.”
In fact, they can. A trust can be designed so that the beneficiary can make meaningful contributions to decisions about investments and distributions, while still receiving asset protection and tax benefits. This structure can offer meaningful balance for families concerned with the idea they might be controlling the assets “from the grave.” They can also help beneficiaries learn to be their own trustee in stages providing a stable training ground.
- “More trusts mean better planning.”
Not necessarily. There can be too much of a good thing. The more trusts you have, the more complicated it can get. For example, if both parents each set up a trust for their three children, there would be six trusts and six sets of decisions to manage as circumstances change over time. The right number of trusts is the number needed to accomplish the family’s goals, not as many as possible.
- “Specific rules are better than guardrails.”
It’s normal to want to anticipate every scenario in the trust document, but sometimes rigidity can create liabilities when circumstances don’t perfectly align with original assumptions. For trust planning, building in flexibility tends to serve families better over the long run.
- “Trusts eliminate all taxes.”
Trusts do not eliminate all taxes. The income and capital gains taxes will still apply to the trust’s activities. With thoughtful irrevocable trust planning, however, the estate and gift taxes can be reduced or effectively eliminated. Irrevocable trusts have compressed income tax brackets, but revocable trusts simply operate as an alias for the person who established them.
- “Trusts are “set it and forget it.”
Trusts require periodic reviews and updates to remain effective investment tools. It’s important to make updates as life events (birth, death, divorce) occur so that beneficiaries are accurate.
How to think about trusts strategically
When working with a family on their trust strategy, advisors often ask clients questions to help surface what the plan actually needs to do. The answers tend to reveal priorities that weren’t explicit before and sometimes expose structures that are working against each other.
A few questions that consistently bring the right issues to the surface:
- What problem does this trust(s) intend to solve?
- What happens to this structure when family circumstances change?
- Who controls decisions now, and who should control them over time?
- How will this trust interact with others already in place?
- How much flexibility should the trustee have, and under what conditions?
Answering these questions and revisiting them periodically is what differentiates reactive estate planning from a trust strategy that can withstand generations.
Finding the right mix
There is no universal template for estate planning, and establishing the right mix of trust structures should reflect a family’s goals, the nature of their assets, and where they want to be down the road. Advisors can help families identify needs and coordinate multiple trusts that work with one another, not against them.
If you’re ready to move from reactive planning to a trust strategy built for the long term, complete the form below to request a conversation.
Frequently Asked Questions
Different trust structures solve different problems. A single trust can rarely address estate tax mitigation, asset protection, privacy, and multi-generational wealth transfer all at once. The combination of structures a family uses — and how those structures are coordinated — is what determines whether the overall strategy is effective.
A revocable trust is essentially treated as an extension of the grantor for tax purposes and doesn’t provide asset protection or remove assets from the taxable estate. An irrevocable trust generally cannot be changed once established, but in exchange offers meaningful tax benefits and asset protection because the assets are no longer considered part of the grantor’s estate.
Yes. A trust can be designed so that a beneficiary has meaningful input over investment decisions and distributions while the asset protection and tax benefits remain intact. Families can also structure this in stages, gradually transferring decision-making responsibility as beneficiaries demonstrate readiness rather than transferring full control all at once.
Yes. Each trust comes with administrative costs, coordination requirements, and ongoing decisions to manage. A plan with more trusts than necessary adds complexity without adding proportional value. The right number is determined by the family’s specific goals — not by a general assumption that more structures mean more protection.
Trusts require periodic reviews and updates to remain effective. At minimum they should be revisited when a significant life event occurs — a birth, death, divorce, or major shift in assets — to ensure beneficiaries and terms remain accurate and aligned with the family’s current goals.
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