Nevada vs. South Dakota: The Top Two Trust Jurisdictions
By Steven J. Oshins, Esq., AEP (Distinguished)
When it comes to selecting the optimal jurisdiction for Dynasty Trusts and Domestic Asset Protection Trusts (DAPTs), two states consistently dominate the rankings: Nevada and South Dakota.
Both offer powerful tools for high-net-worth clients seeking long-term wealth preservation, creditor protection, and tax efficiency. Yet subtle differences in statutory language, judicial climate, and practical enforcement can tilt the strategic advantage toward one or the other depending on the client’s goals.
Dynasty Trusts: Perpetuity and Flexibility
Nevada allows for 365 years of trust duration, while South Dakota offers perpetual trusts with no termination requirement. For clients seeking multi-generational legacy planning, South Dakota’s perpetual structure may appear superior—but Nevada’s 365-year term is more than sufficient for nearly everyone.
Domestic Asset Protection Trusts: Shielding Assets from Creditors
Nevada consistently ranks as the #1 Domestic Asset Protection Trust jurisdiction. Its two-year seasoning period (time before assets are protected from creditors) is among the shortest in the nation. South Dakota, while also strong, has a similar two-year seasoning period.
Nevada’s DAPT statute is notably favorable in limiting exception creditors. Unlike South Dakota, Nevada does not carve out exceptions for divorcing spouses or other exception creditors, making it more attractive for clients concerned about family law exposure. South Dakota’s exception creditors only apply where they had the claim prior to the funding of the trust, so the exceptions rarely apply.
Judicial Climate: Nevada courts have upheld DAPT protections, reinforcing the reliability of its statutes. South Dakota’s judiciary is also favorable, but Nevada’s litigation-tested environment gives practitioners more confidence in enforcement.
Decanting: Fixing and Enhancing the Trusts
Decanting Flexibility: Nevada and South Dakota are neck and neck as the leading trust decanting jurisdictions, offering broad statutory authority to fix drafting errors or enhance the creditor protection and/or tax savings opportunities of a trust without court approval.
Taxation: No State Income Taxes
Taxation: Both states impose no state income tax on trusts, making them ideal for income accumulation and capital gains planning when using non-grantor trusts.
Conclusion: Nevada and South Dakota are the Two Best Trust Jurisdictions
Both Nevada and South Dakota offer elite-level trust planning tools. South Dakota excels in perpetuity flexibility, while Nevada dominates in asset protection and litigation-tested reliability. These are the two leading trust jurisdictions in the United States.
The best bet is to create a strong relationship with a leading trust company in one of these two states, and you can’t go wrong. I use the leading trust company in Nevada and it has worked well for me for 24 years.
ABOUT THE AUTHOR
Steve Oshins, 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 and one of the Top 100 Attorneys in Worth. He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020, 2022, 2024 and 2026. He can be reached at 702-341-6000, ext. 2 or [email protected]. His law firm’s website is www.oshins.com.