April 2, 2019 By Michele Lerner, for Forbes/ Whittier Trust, Brandvoice
Nevada may be known for its casinos and high-stakes poker games, but high-net-worth families will find it no gamble to keep their money there.
“Nevada is one of the most trust-friendly states — and a great alternative to placing your money offshore,” said S. Victoria Kahn, a vice president and client advisor with The Whittier Trust Company of Nevada, Inc. in Reno.
Kahn noted that Nevada’s leaders watched other states, such as Delaware and South Dakota, amend their laws related to trusts to attract money from high-net-worth individuals. They knew becoming trust-friendly would grow their economy.
They were right, as Whittier Trust can testify. Kahn said that more and more of its wealthy clients, with their interest in wealth planning — and particularly in efficiently passing wealth from one generation to another — have recognized that Nevada can offer both flexibility and significant tax savings.
“We have clients in over 30 states, and they’re able to set up a Nevada trust by having Whittier Trust as a trustee,” Kahn said.
Here are three things that establishing a trust in Nevada can do for your family, according to Kahn.
1. Increase your wealth. Nevada’s laws support wealth maximization for future generations through beneficial tax policies, Kahn said. The Silver State imposes no income tax, transfer tax or estate tax.
Nevada also allows for what is often referred to as a “dynasty trust,” which provides for a term of as long as 365 years. By contrast, in neighboring California a trust can last for less than a third of that time.
One family that works with Whittier Trust held multiple long-term trusts in an East Coast state. Transferring those trusts to Nevada let the family avoid state inheritance and income taxes, said Kahn.
2. Protect your assets from creditors. “Nevada has a lot of very forward-thinking laws regarding asset protection that other states, like California, do not have,” said Kahn. “It’s a great alternative to establishing a trust offshore in the Cayman Islands and other jurisdictions.”
Nevada law provides for asset-protection trusts, known as self-settled spendthrift trusts, that prevent most creditors from attaching trust assets and compelling distributions, said Kahn. “We’ve had clients who are not Nevada residents establish Nevada asset protection trusts in order to protect a substantial portion of their wealth from potential future creditors and ensure they have a safety net fund,” said Kahn.
3. Take advantage of flexibility in estate management. One of the most powerful advantages of Nevada’s laws, said Kahn, is their flexibility around drafting new documents, amending existing documents and managing investments.
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