Side-by-side comparison of dynasty trust laws
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Get Personalized Results →| Criteria | Alaska | Tennessee |
|---|---|---|
Dynasty Duration How long can a trust last in this jurisdiction? States that have abolished the Rule Against Perpetui... | 95 1,000 years Higher | 84 360 years |
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 Higher | 78 DAPT with 4-year statute of limitations |
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 | 95 Comprehensive Uniform Directed Trust Act (2020) 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 Full Uniform Trust Decanting Act (2016) 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.
Tennessee modified (but did not abolish) the Rule Against Perpetuities in 2007, extending the permissible trust duration to 360 years. While substantial, this is shorter than perpetual jurisdictions like South Dakota, Nevada, and Delaware.
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.
Tennessee fully repealed the Hall Income Tax effective January 1, 2021. Tennessee now has no state income tax on trust income, interest, dividends, or capital gains. This makes Tennessee equivalent to other no-income-tax states for trust purposes.
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.
Tennessee has DAPT legislation through the Tennessee Investment Services Trust Act. The statute of limitations is 4 years from transfer or 1 year from discovery, whichever is later. Tennessee's DAPT statute is newer than South Dakota or Alaska with less established case law.
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.
Tennessee adopted the Uniform Directed Trust Act effective July 1, 2020, providing comprehensive, modern directed trust and trust protector provisions. The statute allows separation of trustee duties with explicit liability protection for directed trustees following proper directions.
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.
Tennessee adopted the full Uniform Trust Decanting Act effective July 1, 2016. The statute provides broad powers to modify beneficial interests, extend trust terms, change situs, and update administrative provisions. No court approval generally required.
Alaska is better for asset protection despite being less established. Tennessee's tort exception is a critical weakness Alaska doesn't share.
You have Alaska connections, want the original DAPT jurisdiction, and value no income tax.
You have Tennessee ties and genuinely don't care about asset protection.
If asset protection matters at all, Alaska wins. Tennessee's tort exception is like a security system with the back door unlocked.