Tips for Shopping for Out-of-State Trusts

States are modifying their trust laws to attract wealthy families’ trusts to their states. While the competition for business ultimately helps consumers, it can be hard sometimes to separate hype from fact. If you’re contemplating establishing a trust, here are some important factors to consider:

• The state’s tax laws. Do they tax trust income at all? Do they tax out-of-state beneficiaries?
• How long does the state allow the trust to last?
• Are the trust modification laws flexible?
• Are their creditor-protection techniques efficient?
• Are their Trustee protection and requirement provisions in line with your goals?

See Kristen McNamara, States Want Your Trust, W.S.J, June 14, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) and Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this to my attention.