Leading States for Trusts

For states to be competitive for trust business from the wealthy, the state needs to accommodate dynastic trusts, directed trusts, asset protection trusts, and have favorable tax treatment for non-residents. Alaska, Delaware, Nevada, and South Dakota offer all of these options, so they are the leading states to create a trust in right now. If the state fails to offer even one of these options, it might not be considered by families wanting to create a trust.

Providing a high level of asset protection may be one of the most differentiating factors to set states apart this year. Of the top four states, Nevada has the best self-settled asset protection laws. Alaska tried to allow asset protection trusts last year, but there were too many restrictions and fees to actually make it a competitive state.

See Scott Martin, Alaska, Delaware, Nevada, South Dakota Remain Top Trust States, The Trust Adviser Blog, Feb. 5, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.