Until the 1980s, American trusts could last only about 100 years. Then, many states repealed their laws that limited the duration of trusts. This new style of trust, often called a "dynasty trust" to reflect is unlimited duration, has largely taken over trust planning.

This trust planning reached its peak during the last few months of 2012, when families and professional advisers scrambled to lock in federal gift tax exemptions of $5.12 million because the maximum exception was set to drop to $1 million after Dec. 31, 2012. many old trusts with limited duration were raided of their assets to create new dynasty trusts. In some cases, we saw entire families participating in the process and cumulatively transferring more than $40 million to new dynasty trusts.

Now that this fire drill has ended and exemptions have been legislatively locked in at $5.25 million (adjusted upward annually for inflation), many families and family office face a big question: How should these gifted assets be invested on an ongoing basis to ensure that assets are available for future generations?

For the complete article, originally published in Family Business, click here.