Side-by-side comparison of dynasty trust laws
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Get Personalized Results →| Criteria | Alaska | Nevada |
|---|---|---|
Dynasty Duration How long can a trust last in this jurisdiction? States that have abolished the Rule Against Perpetui... | 95 1,000 years | 100 Perpetual (personal property) Higher |
State Income Tax Does the state impose income tax on trust income? States with no income tax or favorable trust taxat... | 100 No state income tax | 100 No state income tax |
Asset Protection How strong are the state's Domestic Asset Protection Trust (DAPT) laws? Key factors include statute ... | 88 First US DAPT state (1997) with 4-year statute of limitations | 95 Strong DAPT with 2-year statute of limitations Higher |
Directed Trust & Trust Protector Does the state have robust statutes for directed trusts (separating investment and distribution duti... | 92 Comprehensive directed trust and trust protector statutes | 98 Comprehensive directed trust and trust protector statutes Higher |
Decanting Flexibility How easily can trust terms be modified through decanting? Broader decanting powers allow for greater... | 90 Broad decanting powers with notice requirement | 92 Broad decanting powers with notice requirement Higher |
Alaska allows trusts to exist for up to 1,000 years, measured from the date of trust creation. This applies to both real and personal property held in trust. While not perpetual, 1,000 years is effectively dynastic for any planning purpose.
Nevada abolished the Rule Against Perpetuities for personal property in 2005. Trusts holding financial assets, securities, and business interests can continue indefinitely. Real property interests remain subject to the common law RAP.
Alaska has no state income tax. The state relies on oil revenues and other sources rather than income tax. Trust income is not taxed at the state level, and Alaska residents receive annual Permanent Fund Dividends.
Nevada's constitution prohibits state income tax. This applies to individuals, corporations, and trusts. Trust income is not taxed at the state level regardless of trustee location, beneficiary location, or income source.
Alaska enacted the first US Domestic Asset Protection Trust statute in 1997. The statute of limitations for fraudulent transfer claims is 4 years from transfer or 1 year from discovery, whichever is later. This is longer than some competing jurisdictions.
Nevada has one of the strongest DAPT statutes with a 2-year statute of limitations for fraudulent transfer claims. The state allows self-settled spendthrift trusts and has fewer exception creditors than many competing jurisdictions.
Alaska has comprehensive directed trust and trust protector statutes. The statutes allow separation of trustee powers among multiple parties with explicit liability protection. Trust protectors can be granted broad powers including modification of trust terms, removal of trustees, and change of situs.
Nevada has comprehensive directed trust statutes allowing separation of trustee duties. Investment advisors and distribution advisors can direct the trustee with explicit liability protection. Trust protector powers are broadly defined and can include powers to modify trust terms, remove trustees, and change situs.
Alaska's decanting statute (enacted 2014) allows trustees with discretionary distribution authority to distribute to new trusts with modified terms. No court approval is required. Decanting can modify administrative and dispositive provisions, merge or divide trusts, and extend trust terms.
Nevada's decanting statute allows trustees with discretionary authority to distribute trust property to new trusts with modified terms. No court approval is required. Decanting can add trust protector provisions, change administrative provisions, and modify beneficial interests in many cases.
Nevada is the stronger choice. Both have no income tax, but Nevada has shorter fraudulent transfer statutes and a more developed trust industry.
You have Alaska connections or assets, or you want the pioneer jurisdiction.
Asset protection matters, you want more trustee options, or you have no Alaska ties.
Nevada has leapfrogged Alaska. Unless you have a specific reason for Alaska, Nevada is the better no-income-tax option.