Sustainability, often discussed in environmental contexts, refers to something that can operate indefinitely without depleting resources. Sustainable systems are renewable, unlike finite resources that eventually run out.
Is your Trust going to “run out”? Will your family’s wealth deplete or grow indefinitely? What makes a Trust or estate “sustainable”? Conversely, what causes depletion?
A Trust or estate is sustainable if it provides value indefinitely without exhausting resources. If your family’s wealth vanishes, it’s not sustainable.
Most Trusts and estate plans are unsustainable. Dividing and distributing assets based on age or milestones often depletes wealth. Only 57% of wealth survives the second generation, and just 9% reaches the third. Yet, some families grow wealth and raise thriving, self-reliant people across generations. What’s the difference?
Single-use, throw-away Trusts tilt toward depletion. They burn wealth and harm people in the process. Most Trusts function this way, enabling consumption rather than preservation.
Blowing Up Bridges
In the 1957 film The Bridge on the River Kwai, Colonel Nicholson (played by Alec Guinness, not Alec Baldwin) builds a bridge, then destroys it. Both acts, driven by conflicting goals, were unintended deviations from the original plan. The bridge wasn’t destroyed because it was poorly built—it was excellent.
Similarly, estate planning Trusts are often created and then dismantled. People set them up for perceived gains, only to see them fail. Why?
Because It’s Always Been Done That Way
Reviewing hundreds of Trusts annually, we see consistent patterns. Most, drafted by attorneys nationwide, rely on centuries-old templates. These address outdated problems, like dividing a small farm among many children, not managing significant digital and monetary wealth for a smaller, declining population.
Most Trusts merely transfer assets from one generation to the next. Once the transfer is complete, the Trust terminates, offering no ongoing protection. These short-term Trusts are cheaply made and poorly maintained.
Consider a $350 bargain bike versus a $5,000 professional one. Both have two wheels and handlebars, but their purposes differ. The cheap bike suits occasional rides with grandchildren, while the high-end model excels in a 500-mile race like RAGBRAI (Register’s Annual Great Bicycle Ride Across Iowa). The right choice depends on your goals.
Don’t Ask Questions You Don’t Want the Answer To
Should you choose a simple, cheap Trust or a high-end Dynasty Trust? Don’t ask your children. One of the worst estate planning mistakes is seeking their input. Questions about Trusts yield unhelpful answers, as parents and children often have conflicting goals.
For example, if you’re concerned about a teenager’s work ethic but want them to enjoy life, you might ask: “would you rather first do the dishes, take out the trash, fold your laundry, and clean you room, and then I’ll give you $40 to have fun with your friends, or would you just like me to give you $40 now for doing nothing?” The answer is predictable. Free money breeds dependency and contempt. Earning rewards fosters lasting gratitude.
Mature adults prioritize long-term benefits over immediate gratification. Investing for the future means spending less now. Trusts are no different.
The Dynasty Trust Difference
An heirloom holds special value, passed down through generations. A Dynasty Trust, designed for longevity, includes these features:
- Flexibility: Not tied to one state’s laws, it adapts to the most favorable jurisdiction.
- Perpetuity: Leverages laws allowing indefinite Trust duration and tax exclusions for multi-generational wealth accumulation.
- Protection: Shields wealth and beneficiaries from divorce, bankruptcy, lawsuits, and other risks.
- Discretionary Distributions: Assets stay in the Trust, with limited, purpose-driven distributions, not mandatory handouts.
- Empowerment: Beneficiaries access capital for loans, purchases, or ventures, fostering wealth creation, not consumption.
- Dispute Resolution: Robust provisions avoid court through alternative methods, with a Trust Protector to ensure accountability.
- Tax Efficiency: Allocates income to the most tax-advantaged beneficiaries.
- Values: Incorporates your “Ethical Will” or “Spiritual Will” to reflect your culture and policies.
- Governance: Designed for multi-generational operation, with updateable schedules for changing information.
Is a Trust more valuable if it endures? A throw-away Trust avoids probate but won’t protect wealth long-term. A Dynasty or Legacy Trust, however, becomes a lasting heirloom. The choice is yours.
Recently a new client who is a brilliant entrepreneur and has built a vast financial empire asked me, “why wouldn’t everyone do this?” His follow-up question was “why didn’t my other attorneys tell me about this?” Then he said, “I know my other attorneys are very good at what they do, but they don’t do this. I guess I have answered my own question.”
Throw-Away Trusts © 2025 by Rick Durfee is licensed under CC BY 4.0 
Throw-Away Trusts