State Comparison for Wealth Transfer Planning

State Comparison For Wealth Transfer Planning

Corporate Trusteeship, Legacy Planning, Nevada Advantages, Private Family Trust Companies, Wyoming Advantages

In the current environment, many families are reevaluating and modifying their fiduciary structures. To assist in these discussions, we have created a reference summary of state laws that client families should consider when establishing wealth transfer plans and structures, including taxation, trust laws, asset protection, and regulated and unregulated private trust companies.

Our updated summary includes a broader aggregation of top US trust jurisdictions. You can view a downloadable PDF with summary tables and statute references here.

Taxation

Tax Imposed Due to Resident Settlor

Nevada: No
Wyoming: No
Alaska: No
Delaware: Yes, provided trust has resident beneficiary
New Hampshire: No
South Dakota: No
Tennessee: No

Tax Imposed Due to Resident Fiduciary

Nevada: No
Wyoming: No
Alaska: No
Delaware: Yes, provided trust has resident beneficiary
New Hampshire: No
South Dakota: No
Tennessee: No

Tax Imposed Due to Resident Beneficiary

Nevada: No
Wyoming: No
Alaska: No
Delaware: No
New Hampshire: No
South Dakota: No
Tennessee: No

Resident Non-Grantor Trusts

Maximum Resident Non-Grantor Trust Income/Capital Gains Tax

Nevada: None
Wyoming: None
Alaska: None
Delaware: 6.6%, deduction allowed for nonresident beneficiaries
New Hampshire: None
South Dakota: None
Tennessee: None

Corporate Income Tax

Nevada: None
Wyoming: None
Alaska: None
Delaware: 8.7% of DE income
New Hampshire: None
South Dakota: None
Tennessee: 6.5%

LLC Income Tax

Nevada: None
Wyoming: None
Alaska: None
Delaware: None
New Hampshire: None
South Dakota: None
Tennessee: 6.5%

Estate/Gift Tax

Nevada: None
Wyoming: None
Alaska: None
Delaware: None
New Hampshire: None
South Dakota: None
Tennessee: None

Life Insurance Premium Tax

Qualified

Nevada: None
Wyoming: None
Alaska: 2.7% for the first $100K, 0.1% thereafter
Delaware: 1.75%
New Hampshire: 1.25%
South Dakota: 2.5% for the first $100K, 0.08% thereafter
Tennessee: 1.75%

Non-Qualified

Nevada: 3.5%
Wyoming: 0.75% for the first $100K, 0.075% there- after
Alaska: 2.7% for the first $100K, 0.1% thereafter
Delaware: 2% below $100K, none thereafter
New Hampshire: 1.25%
South Dakota: 2.5% for the first $100K, 0.08% thereafter
Tennessee: 1.75%

Retaliatory

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Modern Trust Laws

Directed Trust

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Trust Protector

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

NJSA Statute

Nevada: Yes
Wyoming: Yes
Alaska: No
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Virtual Representation

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

By Holder of General Power

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: No
Tennessee: Yes

By Parent/Guardian

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

By Person with Identical Interest

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Rule Against Perpetuities (RAP)

Nevada: 365 years
Wyoming: 1,000 years
Alaska: 1,000 years
Delaware: Perpetual / 110 years for real property
New Hampshire: Perpetual
South Dakota: Perpetual
Tennessee: 360 years

Court Records Sealed

Nevada: Upon court order
Wyoming: Automatic, inquiring party must show cause
Alaska: No
Delaware: No
New Hampshire: Upon court order; see Petition of Keene Sentinel, 136 NH 121 (1992)
South Dakota: Automatic, inquiring party must show cause
Tennessee: No

Trust Required to Register

Nevada: No
Wyoming: No
Alaska: No
Delaware: No
New Hampshire: No
South Dakota: Optional
Tennessee: Optional

Decanting

Nevada: Yes
Wyoming: Yes
Alaska: Yes
Delaware: Yes
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Forced Heirship Precluded

Nevada: No
Wyoming: Yes
Alaska: No
Delaware: No
New Hampshire: Yes
South Dakota: No
Tennessee: No

Regulated PTC Authorized

Nevada: Yes
Wyoming: Yes
Alaska: No
Delaware: LPTCs only
New Hampshire: Yes
South Dakota: Yes
Tennessee: Yes

Unregulated PTC Authorized

Nevada: Yes
Wyoming: Yes
Alaska: No
Delaware: No
New Hampshire: Yes, lightly regulated
South Dakota: No
Tennessee: No

We hope this is helpful for you and your client families; please contact us to talk about fiduciary solutions.

Please contact Willow Street if you would like additional information on any of the topics discussed herein. Willow Street Group, LLC and its principals, agents, and affiliates do not provide legal or tax advice with respect to any matter, and no part of its services may be construed as legal or tax advice. For educational purposes only.