"In a significant number of family trusts, it's actually after-tax money that goes into those trusts." - Yes but then YOU, who did not earn it, don't pay your fair share of tax on it.     Unlike small business owners who DID earn it.  Talk about a 'loophole'. 

Just because your grandfather paid tax on it does not mean you should get beneficial tax treatment.  Hypocrite.  Dead money indeed.  I guess your kids get to be rich too without having to pay taxes on it either, some policy!