Q: Can you provide me a comparison of Nevada vs Texas for trust situs?
A: Neither Texas nor Nevada have a state income tax, however, there are still some notable differences in trust law between the two states:
In Nevada, the Dynasty Trust can last up to 365 years, whereas in Texas they follow the common law rule against perpetuities (90-120 years).
Texas does not have Self-Settled Spendthrift Trusts aka Asset Protection Trusts. Only 16 states allow these types of trusts. Texas is not one of them. These trusts are when a grantor sets up a trust for their own benefit. In Nevada, two years from the date of transfer, those assets should be creditor protected. Here is a good blog post on Nevada Asset Protection Trusts. http://bit.ly/1LUvfa5
Decanting is a hot topic in estate planning. Decanting allows the terms of an existing irrevocable trust to be altered by creating a duplicate trust with more favorable terms and “decanting” the assets of the old trust into the new trust. In Texas, you cannot decant from an ascertainable standard into a discretionary trust. In Nevada, this is allowed.