A “dynasty trust” is a trust that is structured to preserve assets for multiple generations. Assets continue to be held in trust (rather than being distributed directly to beneficiaries). This is not a vehicle to protect your assets from your own personal creditors; but it protects the assets once they pass to a beneficiary.
For example, let’s say you plan to leave your daughter $1 million when you die. That money immediately becomes available to most of her creditors as soon as she receives it. So if there are any judgments against your daughter or she otherwise has any financial issues, your assets could go to pay her creditors.
But if upon your death you leave her the $1 million in a properly structured dynasty trust, those funds can pretty much be available to her but will generally be protected from her creditors. While she could not automatically protect her own assets from her own creditors, you are allowed to protect the assets that you give her from her creditors.
This is obviously a simplified description of a trust that must be carefully structured. But if you hope to leave a significant amount of assets to your children or other beneficiaries, you should talk to your estate planning attorney about leaving those assets in a trust (perhaps a dynasty trust) to protect them from your beneficiary’s creditors.