“If I am from a state other than Nevada, why should I and have my trust administered in Nevada?” Not only is this a question we hear all the time, but it was also a Twitter direct message a few weeks ago. Trust situs is not determined by where the beneficiary lives, or the governing law stated in the trust document. The governing law determines which state statutes are looked upon when issues arise for interpretation. Most people are surprised when we say approximately 60 percent of our beneficiaries live outside of Nevada. The situs of the trustee is determined by us being a Nevada Chartered Trust Company, and doing business in Nevada. In regards to income taxes, being a Nevada chartered trust company is the reason we can avoid the potential of state fiduciary income taxes, even if the governing law of the trust is elsewhere. So why are people moving their trusts to Nevada..? Nevada situs takes advantage of our progressive trust and tax laws. Also, at Premier Trust, we have an experienced staff, provide excellent client service, and only provide administrative services.
Benefits of Nevada:
- Typically, if a state has a personal income tax they probably also have a fiduciary state income tax. Nevada has neither tax, and this helps reduce the erosion of trust assets by the tax rate. The trust will always have to file a federal income tax return, but using a Nevada situs trustee will usually avoid any need to file a state fiduciary income tax return. However, if a beneficiary of a Nevada trust receives a trust distribution, that may be subject that individual to their own state’s personal income tax filings.
- Nevada Dynasty trust laws can have a trust last for 365 years. This may allow a trust to avoid the estate tax arena for multiple generations. Dynasty trusts are how wealth is accumulated by the compounding effect of its assets.
- Nevada is considered one of the best state jurisdictions for domestic asset protection. If you have not read our blog post on, “The Four Things You Need to Know about a Nevada Asset Protection Trust,” please give it a quick read.
- Nevada laws now permit the decanting of an irrevocable trust. Many clients do not like to use irrevocable trusts as they feel the document can never be changed. However, Nevada laws are very flexible and allows this ability to decant a current trust to another new trust, should circumstances change to warrant the prior trust to be disregarded.
- Nevada allows directed trusts. This provides for the duties within the administration of the trust to be separated to have the trustee perform administrative functions and an outside investment adviser to manage the trust portfolio. Many clients like the idea of splitting these duties so as one entity does not control all aspects of their estate plan. Premier Trust was created as a directed trustee since we began in 2001. We are not attorneys, CPA’s or investment managers, so the client can be assured that as trustee, we will keep their trusted advisors in place after they have passed.
For further information or materials on these topics in our brief synopsis, please email us at email@example.com or call us at 702 577-1777. Remember “It’s a Matter of Trust” (sm)