Nevada Trust Advantages

Nevada continues to be a solid choice
for the creation and administration of modern trusts.

Advantages of Nevada Trusts

1 Tax Savings

  • No state income, capital gains, estate, or gift tax, therefore, income generated in the trust is never taxed at a state level. This makes Nevada a great option for those looking to reduce their tax burden.
  • Nevada law has more private letter rulings related to the use of incomplete non-grantor trusts than any other state. Under a series of private letter rulings, the IRS has held that trusts drafted with certain provisions allow for transfers to the trust to be considered incomplete for gift tax purposes and for the trust to be deemed a non-grantor trust. All three states allow for incomplete non-grantor trusts. Under this structure, a trust that is created in Nevada can avoid state income tax.

2Protection & Control

  • Allows for self-settled spendthrift trusts (a.k.a. Domestic Asset Protection Trust, or “DAPT”), whereby the grantor can create the trust and be a discretionary beneficiary.
  • One of the shortest look-back periods (2 years) for known creditors, to be fully protected from creditor claims brought against a trust. There are immediate protections in place but after vesting, no claims can be brought against the trust.
  • Nevada has no statutory exception creditors, meaning no class of creditors is protected under the law.

3Perpetual “Dynasty” Trusts

  • Abolished the Rule Against Perpetuities (the limitation on the length of time a trust can last). Nevada trusts can last 365 years, allowing for generational protection.
  • Nevada dynasty trusts allow families to benefit from significant transfer tax savings over generations with the appropriate planning and trust structure.

4Flexibility & Opportunity

  • The grantors, beneficiaries, co-trustees, investment advisors or trust protectors do not have to live in Nevada, provided there is one qualified Nevada resident trustee, such as Peak Trust Company.
  • Allows for directed trusts, under which responsibilities and control can be divided between specific trustees and trust advisors, allowing the use of non-trustee investment advisors.
  • Laws support trust decanting, or changing the terms, even in “irrevocable” trusts, to allow the trustee to respond to changing laws, circumstances, and best interests of beneficiaries.

With the ability to decant trusts, create directed and spendthrift trusts, have trust protectors appointed and change the terms of trusts, the state of Nevada provides an incredible opportunity to help families protect their legacy with excellent estate planning. These freedoms and protections also foster the proper administration of these agreements and assist in dealing with unforeseen circumstances to the advantage of the trust and its beneficiaries.

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