Best States for Trusts
Which states offer the most favorable trust laws for asset protection, privacy, dynasty trusts, and tax? Here's a comparison of the top trust jurisdictions in the United States.
Comparison Table
| State | State Income Tax | Estate/Inheritance Tax | Rule Against Perpetuities | Self-Settled Asset Protection | UTC Adopted |
|---|---|---|---|---|---|
| South Dakota — Tier 1: Top-tier trust jurisdictionSouth Dakota | None | None | Abolished (perpetual) | Yes (2-year seasoning) | Yes |
| Nevada — Tier 1: Top-tier trust jurisdictionNevada | None | None | 365 years | Yes (2-year seasoning) | No (own statutes) |
| Delaware — Tier 1: Top-tier trust jurisdictionDelaware | None on out-of-state trusts | None | Abolished (perpetual) | Yes (4-year seasoning) | No (own statutes) |
| Wyoming — Tier 1: Top-tier trust jurisdictionWyoming | None | None | 1,000 years | Yes (4-year seasoning) | No (own statutes) |
| Alaska — Tier 1: Top-tier trust jurisdictionAlaska | None | None | 1,000 years | Yes (4-year seasoning) | No (own statutes) |
| Tennessee — Tier 2: Strong alternative trust jurisdictionTennessee | None (wages) | None | Abolished (perpetual) | Yes (2-year seasoning) | Yes |
| Florida — Tier 2: Strong alternative trust jurisdictionFlorida | None | None | 360 years | Yes | Yes |
| Ohio — Tier 2: Strong alternative trust jurisdictionOhio | Yes (flat ~3.5%) | None (repealed) | Abolished (opt-out) | No | Yes |
Detailed Breakdown
South Dakota — Tier 1: Top-tier trust jurisdiction South Dakota
Best for: Asset protection, dynasty trusts, privacy
- Perpetual dynasty trusts — no rule against perpetuities
- Self-settled asset protection trusts with short 2-year seasoning
- No state income tax, no estate tax, no inheritance tax
- Strong privacy — trust filings not public record
- Dedicated trust courts and experienced trust industry
Nevada — Tier 1: Top-tier trust jurisdiction Nevada
Best for: Asset protection, business trusts, dynasty trusts
- 365-year dynasty trust period — among the longest
- Self-settled spendthrift trusts with 2-year seasoning
- No state income tax, no estate tax
- Comprehensive statutory business trust framework (NRS Ch. 88A)
- Strong charging order protection for DAPTs
Delaware — Tier 1: Top-tier trust jurisdiction Delaware
Best for: Business trusts (DST), institutional trust administration
- Perpetual dynasty trusts — no rule against perpetuities
- Self-settled asset protection trusts (4-year seasoning)
- Delaware Statutory Trust (DST) — widely used business trust vehicle
- No state income tax for non-resident trusts
- Court of Chancery — specialized business/trust court
Wyoming — Tier 1: Top-tier trust jurisdiction Wyoming
Best for: Asset protection, privacy, cost-conscious trust administration
- 1,000-year dynasty trust period
- Self-settled asset protection trusts
- No state income tax, no estate tax
- Low fees and minimal regulation
- Strong privacy protections
Alaska — Tier 1: Top-tier trust jurisdiction Alaska
Best for: Asset protection, dynasty trusts
- Pioneered self-settled asset protection trusts (1997)
- 1,000-year dynasty trust period
- No state income tax, no estate tax
- Alaska Trust Act — comprehensive DAPT framework
- Requires Alaska trustee and partial administration in Alaska
Tennessee — Tier 2: Strong alternative trust jurisdiction Tennessee
Best for: Asset protection, dynasty trusts, business trusts
- Perpetual dynasty trusts — abolished RAP
- Self-settled spendthrift trusts with short 2-year seasoning
- No state income tax on wages, no estate tax
- Explicitly codifies Massachusetts trust law
- Modern UTC adoption with directed trust provisions
Florida — Tier 2: Strong alternative trust jurisdiction Florida
Best for: Dynasty trusts, homestead protection, warm-climate situs
- Self-settled spendthrift (Dynasty) trusts permitted
- 360-year perpetuity period
- No state income tax, no estate tax
- Strong homestead protections
- UTC-adopted with trust director provisions
Ohio — Tier 2: Strong alternative trust jurisdiction Ohio
Best for: Business trusts, dynasty trusts
- Dynasty trust opt-out (ORC § 2131.09(B)) — requires affirmative statement + unlimited trustee power
- No state estate tax (repealed)
- Comprehensive business trust statute (ORC Ch. 1746)
- Memorandum of trust concept for real property (ORC § 5301.255)
- Business trusts are separate unincorporated legal entities
Key Factors to Consider
Rule Against Perpetuities (RAP)
The RAP limits how long a trust can last. States that have abolished or extended RAP allow "dynasty trusts" that can last for centuries or indefinitely, preserving wealth across multiple generations without triggering transfer taxes at each generation.
Self-Settled Asset Protection Trusts (DAPTs)
A DAPT allows you to create an irrevocable trust for your own benefit with creditor protection. "Seasoning period" is how long assets must be in the trust before they're protected from creditors. Shorter seasoning (2 years) is more favorable.
Tax Treatment
States with no income tax, no estate tax, and no inheritance tax are most favorable for trust administration. Some states (like Delaware) exempt out-of-state trusts from state income tax entirely.
Privacy
Some states require trust filings to be public record (e.g., Ohio business trusts). Others keep trust information private. For maximum privacy, look at South Dakota, Nevada, and Wyoming.
UTC Adoption
States that adopted the Uniform Trust Code have standardized, predictable trust laws that institutions understand. Non-UTC states (Nevada, Delaware) may have more specialized or flexible frameworks.