Side-by-side comparison of dynasty trust laws
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Get Personalized Results →| Criteria | Tennessee | Wyoming |
|---|---|---|
Dynasty Duration How long can a trust last in this jurisdiction? States that have abolished the Rule Against Perpetui... | 84 360 years | 95 1,000 years 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 ... | 78 DAPT with 4-year statute of limitations | 90 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... | 95 Comprehensive Uniform Directed Trust Act (2020) | 100 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... | 92 Full Uniform Trust Decanting Act (2016) | 95 Broad decanting powers Higher |
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.
Wyoming abolished the Rule Against Perpetuities in 2003, allowing trusts to last up to 1,000 years. While not perpetual, this effectively provides dynastic duration for any practical planning purpose. The 1,000-year limit applies to both real and personal property.
Tennessee fully repealed the Hall Income Tax effective January 1, 2021.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.
Wyoming'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 grantor residence.
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.
Wyoming enacted its Qualified Spendthrift Trust statute in 2007. The 2-year statute of limitations for fraudulent transfer claims is competitive with South Dakota and Nevada. Self-settled spendthrift trusts are permitted.
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.
Wyoming has comprehensive directed trust and trust protector statutes enacted in 2011 and expanded since. The statutes allow complete separation of trustee duties 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 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.
Wyoming's decanting statute (enacted 2013) provides broad powers. Trustees with absolute discretion can decant to new trusts with virtually any modified terms. Even trustees with limited discretion can change administrative and governance provisions. No court approval required.
Wyoming is the clear winner. No income tax, 1,000-year duration, and no tort exception weakness. Tennessee has no advantage unless you have local ties.
You have deep Tennessee connections and accept the asset protection limitations.
You want better asset protection, lower costs, and a more flexible statute.
Wyoming beats Tennessee on almost every metric. The only reason to choose Tennessee is if you're already there and want to keep things local.