A “Champ-Champ” is someone who holds two championship belts simultaneously. And one other option is to call such a person “Double Champ”.
In determining which trust jurisdiction is a Champ-Champ, we must focus on the three most important titles to hold: Best Dynasty Trust Jurisdiction, Best Domestic Asset Protection Trust Jurisdiction and Best Trust Decanting Jurisdiction.
The Top Trust Jurisdictions
If you ask most people, Alaska, Delaware, Nevada and South Dakota (in alphabetical order) are the top trust jurisdictions. However, a lot of this has to do with marketing.
The technicians in our industry will generally tell you that Nevada and South Dakota (in alphabetical order) are the top trust jurisdictions. Certainly, Alaska and Delaware and a few others aren’t too far behind, but they aren’t Nevada or South Dakota since each has flaws.
Best Dynasty Trust Jurisdiction
The Best Dynasty Trust Jurisdiction (a) has no state income tax, (b) has a long perpetuities period that allows the trust to continue for a long time, (c) has no case law or statutory law allowing any classes of creditors to bust through a third-party spendthrift trust, (d) has strong Domestic Asset Protection Trust laws, and (e) has flexible trust decanting laws.
South Dakota and Nevada are the leading Dynasty Trust jurisdictions. However, South Dakota has a slight edge over Nevada – it allows perpetual Dynasty Trusts, whereas Nevada limits Dynasty Trusts to 365 years. This is a tiny difference that makes no difference to nearly all of our clients. But it is a difference, no matter how small it may seem.
Therefore, South Dakota is the Champ when it comes to Best Dynasty Trust Jurisdiction!
Best Domestic Asset Protection Trust Jurisdiction
The Best Domestic Asset Protection Trust Jurisdiction (a) has no state income tax, (b) has not passed the Uniform Voidable Transactions Act, (c) has no case law or statutory law allowing any classes of creditors to bust through a self-settled spendthrift trust, (d) has a short statute of limitations, and most importantly (e) doesn’t require a new Affidavit of Solvency to be signed before each and every transfer to the trust.
Nevada and South Dakota are the leading Domestic Asset Protection Trust jurisdictions. However, Nevada has a slight edge over South Dakota – it has no exception creditors, whereas South Dakota has a few classes of exception creditors, but they only exist where that exception creditor’s debt exists at the time of the transfer to the trust. This is a tiny difference that has only a few small chance of actually happening. But it is a difference, no matter how small it may seem.
Therefore, Nevada is the Champ when it comes to Best Domestic Asset Protection Trust Jurisdiction!
Best Trust Decanting Jurisdiction
The Best Trust Decanting Jurisdiction (a) allows a support trust to be decanted into a discretionary trust (to maximize the creditor protection), (b) allows the new trust to remove mandatory income distribution provisions that were in the prior trust, (c) allows the new trust to move remainder beneficiaries up to being present beneficiaries, (d) allows the new trust to grant a beneficiary a power to appoint income and principal to someone who wasn’t a beneficiary of the prior trust, and most importantly (e) doesn’t require notice to the beneficiaries (since our clients value privacy).
Nevada and South Dakota are the leading trust decanting jurisdictions. In fact, the decanting statutes in these two jurisdictions are virtually identical.
Therefore, Nevada and South Dakota are the Co-Champs when it comes to Best Trust Decanting Jurisdiction!
There are Two Champ-Champs!
Nevada and South Dakota can both call themselves the Champ-Champ!
Actually, One More Champ-Champ
After being named the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and more recently the “Las Vegas Tax Law Lawyer of the Year” by The Best Lawyers in America®, I am now a “Champ-Champ” too! But since I never would have received these honors without the help of my 11 co-employees at Oshins & Associates, this means that all 12 of us are Champ-Champs!
ABOUT THE AUTHOR
Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He was named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor. Steve was also named one of the Top 100 Attorneys in Worth and is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates Lawyer of the Year in 2012, 2015 and 2018 and Tax Law Lawyer of the Year in 2016 and 2020. He can be reached at 702-341-6000, ext. 2, at email@example.com or at his firm’s website, www.oshins.com.