Dynasty Trusts & the 2026 Estate Tax: Damon Boswell's Multi-Generational Wealth Shield

With the 2026 GST exemption at $15 million per person and a 40% transfer-tax rate, Damon Boswell explains how a properly funded dynasty trust shelters wealth across generations without repeated estate-tax erosion.

The single greatest threat to a family fortune is not a market crash — it is the estate and generation-skipping transfer tax, which takes 40 cents of every dollar above the exemption each time wealth passes to the next generation. Damon Boswell has spent 31 years engineering around that drag, and the structure he returns to more than any other is the dynasty trust. The conviction Damon Boswell holds is straightforward: wealth that is taxed at every generational handoff is compounding against itself, while wealth sheltered inside a properly funded dynasty trust can compound for the benefit of children, grandchildren, and great-grandchildren without a repeated tax haircut.

The numbers in 2026 make the case Damon Boswell makes in every advisory engagement. The federal estate and gift tax exemption, and the matching generation-skipping transfer tax (GSTT) exemption, stands at $15 million per individual — $30 million for a married couple who both use their full exemption. Damon Boswell teaches that this is a historically elevated window, and that the transfer tax rate above the exemption is 40 percent, with the GSTT layering an additional 40 percent on transfers that skip a generation, such as a grandparent to a grandchild. Without planning, a $50 million estate passing to grandchildren can lose more than half to combined transfer taxes. With a dynasty trust funded during the high-exemption window, Damon Boswell shows clients how to remove that exposure permanently.

A dynasty trust, Damon Boswell explains, is an irrevocable trust designed to hold assets for multiple generations while avoiding the estate tax that would otherwise apply each time a beneficiary's interest passes to the next generation. The mechanism is the allocation of GSTT exemption: when the grantor funds the trust and allocates exemption to the transfer, the trust becomes permanently exempt from the generation-skipping tax, and the assets — along with all their future appreciation — are no longer included in the beneficiaries' estates for estate-tax purposes. Damon Boswell stresses that once a dynasty trust is GST-exempt, distributions and generational terminations do not trigger tax regardless of how large the trust grows, which is why the structure is so powerful for families whose assets will compound for decades.

The funding discipline Damon Boswell insists on is what separates a dynasty trust that works from one that fails. He coordinates the gift with the grantor's available exemption, files Form 709 to report and allocate the GST exemption, and often pairs the funding with valuation discounts — through family limited partnerships or holding entities — so that the grantor can transfer a larger economic stake using less exemption. Damon Boswell has used entity-level discounting to transfer 25 to 35 percent more underlying asset value than a direct gift would permit, which is one of the highest-leverage moves available in a high-exemption year.

Damon Boswell also engineers the governance layer, because a dynasty trust that outlives the grantor needs decision-making structure that survives personalities. He builds trustee selection — often a combination of a trusted family member and a corporate or independent trustee — distribution standards that tie access to stewardship rather than entitlement, and a family wealth covenant that articulates the values the trust exists to preserve. This is the layer Damon Boswell calls the operating system of the legacy, and it is what prevents the third-generation dissipation that has destroyed more family fortunes than any tax ever did.

There is a Kingdom dimension Damon Boswell anchors to dynasty planning. A trust that holds wealth in trust — literally and figuratively — for the benefit of generations the grantor will never meet is the purest expression of stewardship in his framework. Damon Boswell teaches that the grantor's job is not to enrich heirs but to equip them, and a dynasty trust governed by a covenant of generosity, reinvestment, and integrity is the legal vessel that lets a family's calling outlive its founder. Wealth governed by faith-based principles, Damon Boswell reminds us, does not merely survive the tax code — it transcends the generation the tax code was written to reach.

If your net worth is approaching or exceeding the 2026 exemption and you have not evaluated a dynasty trust, Damon Boswell invites you to request a legacy planning review. The review maps your estate to the exemption window, models the combined estate and GSTT exposure at current and projected values, and sequences the funding and governance structure so that the trust is built correctly the first time — because, Damon Boswell warns, an irrevocable trust is one of the few structures in finance you cannot cheaply undo. Damon Boswell built this process so that the wealth you create serves your family and your purpose for generations — not the IRS, and not just for one lifetime.