The trusts generally need to pay taxes on any income or gains, but if there are stakes for private businesses, capital gains taxes aren’t owed until the business is sold. With the right planning, a trust funded with a $22 million tax exemption can wind up being worth far more than $22 million.

Like most trusts, they offer control over where money goes and how it gets spent, and they can shield assets from heirs’ creditors and former spouses.

The trustee for Dillon’s clients—Brown Brothers Harriman’s Delaware offshoot—will have the final say on who gets what. It will be guided by the clients’ wishes for the money to be used primarily to fund the educations and first-home purchases of their offspring, along with any emergencies such as medical costs.

Mnuchin placed assets worth at least $32.9 million into the Steven Mnuchin Dynasty Trust I, according to a disclosure to federal ethics officials made public last year, as well as securities filings by a company at which he used to work. The assets include corporate stock and interests in a Willem de Kooning painting and a three-engine corporate jet. A Treasury spokeswoman declined to comment.

Republicans have long sought to eliminate the so-called death tax—a 40 percent levy that’s been around in some form since 1916—arguing that it threatens family businesses. But pushback from Republican senators during tax negotiations resulted in the law only increasing the exemption amount temporarily.


For their part, Democrats have said that repealing the tax is a giveaway to the rich and will only exacerbate surging wealth inequality. A proposal by Senate Democrats in March called for restoring the $11 million exemption amount for couples to help pay for a $1 trillion infrastructure package.

“This idea of starting dynasty trusts will, I think, have a lot of legs in 2018,” said Edward Reitmeyer, a tax partner at Marcum. Part of what’s driving the interest is that the higher exemption amount makes the costs of setting up and maintaining the trusts over time better worth it, according to Reitmeyer.

The costs vary according to how complicated the financial situation is and what’s going into the trust, but generally lawyers, trust companies, accountants and investment managers may be involved and will thus need to get paid.

A further reason for the interest in dynasty trusts? The “tremendous explosion” of wealth makes it essential to move those assets out of the estate before they’re worth too much, said Jonathan Forster, a partner at estate planning firm Weinstock Manion. The U.S. stock market has more than tripled since 2009.

“Our toolbox is getting bigger and bigger,” Forster said. “A lot of clients want to take advantage of this new law. It’s definitely been a busy time.”