Posted on October 17, 2013 by Gregory Herman-Giddens

Top 5 States for Dynasty Trusts

Dynasty trusts in North Carolina offer creditor and asset protection for future generations while at the same time legally bypassing certain taxes. For the first time last year, attorney Steve Oshins prepared a ranking system that compares tax implications, spendthrift provisions, perpetuity rules, and other factors affecting dynasty trusts in every state. Oshins just released the 2nd Annual Dynasty Trust Rankings Chart.

Although North Carolina did not make the Top 5, the states with the most attractive regulations of dynasty trusts in 2013 are:

  1. South Dakota
  2. Alaska/Nevada (tied)
  3. Tennessee
  4. Ohio
  5. Wyoming

All of these states, except Wyoming, also ranked in the Top 5 for Domestic Asset Protection Trusts. Tennessee ranked high once again. Although our estate planning lawyers are headquartered in Chapel Hill, North Carolina, we also serve Tennessee–the benefits of a dynasty trust are not lost if your state does not appear on the list or if your state does not permit dynasty trusts. Individuals can take advantage of attractive trust laws out-of-state by using a corporate trustee in the state of their choice.

Work with a trust attorney to create a dynasty trust before funding or attempting to modify one. The Obama Administration proposed limiting the dynasty trust term to 90 years in the 2014 budget, which could cause significant tax obligations for future generations. The proposed limitation would only affect new dynasty trusts or new gifts made to existing dynasty trusts.

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