It’s Time to Stop Using Health, Education, Maintenance and Support Trusts!

By Steven J. Oshins, Esq., AEP (Distinguished) Thanks to the generosity of Leimberg Information Services, we are pleased to provide you this recently published article on LISI. EXECUTIVE SUMMARY Nearly Everybody Nearly every estate planning attorney uses “health, education, maintenance and support” (“HEMS”) as a distribution standard in the trusts they draft.  This language is probably found in more than 95% of the trusts that are drafted nowadays. Some trusts use it as the sole method of making trust distributions, whereas others have provisions giving an interested trustee the ability to distribute under this standard and also allow an independent trustee…

The Beneficiary Controlled Trust*

By Steven J. Oshins, Esq., AEP (Distinguished) The Beneficiary Controlled Trust name was first introduced to the estate planning industry by my father and me in our two-part article, “Protecting & Preserving Wealth into the Next Millennium,” published in the September and October 1998 issues of Trusts & Estates magazine.  [Portions of this article were taken from the 1998 article.]  Since that time, the Beneficiary Controlled Trust concept has been widely used by estate planners all over the country.  This article describes this philosophy. Background Most trust scriveners draft trusts that make mandatory distributions to the beneficiaries upon reaching certain…

Steve Oshins Releases 10th Annual Non-Grantor Trust State Income Tax Chart

By Steven J. Oshins, Esq., AEP (Distinguished) Different states have different rules as to what creates a “resident trust” that is subject to taxation in that state. States may tax a trust based on the residency of the settlor or testator, based on whether there is a resident trustee or beneficiary or whether there is administration in that state, or for a combination of these factors and/or other similar factors. So it isn’t as easy as simply situsing a trust in a state with no state income tax. You have to look at the state taxing statutes that may apply….

Heckerling 2024 Reports from the ABA

The 2024 Heckerling Institute was held in-person (and virtually) in Orlando on January 8-12 and marked the conference’s 58th year. The Phillip E. Heckerling Institute on Estate Planning is the nation’s premier conference for estate planning professionals, offering unparalleled educational and professional development opportunities for all members of the estate planning team.  Over the course of the conference’s five days, numerous timely topics of interest to estate planners of all designations—including, but not limited to, attorneys, trust officers, accountants, charitable giving professionals, elder law specialists, wealth management professionals, and nonprofit advisors. As they have done for many years, the American…

Which Jurisdictions Are Best in 2024?

By Steven J. Oshins, Esq., AEP (Distinguished) It often makes sense to situs clients’ trusts in a trust jurisdiction where there is no state income tax, where the trust assets are protected from creditors and divorcing spouses, where estate taxes can be avoided forever or close to forever, and where there is flexibility to make changes to irrevocable trusts that are otherwise protected. But which jurisdictions are best? The First Tier Two trust jurisdictions stand above the rest, Nevada and South Dakota.  Although one can argue for one or the other as #1, there is absolutely no believable argument that…

Domestic Asset Protection Trusts: Why the Huber Case is a Million Percent Wrong

By Steven J. Oshins, Esq., AEP (Distinguished) In Waldron v. Huber (In re Huber), Waldron v. Huber (In re Huber), Case No. 11-41013 (Bankr. W.D. Wash. Nov. 25, 2013), the court (in dicta) ruled that the law of the residency of the settlor of a Domestic Asset Protection Trust (“DAPT”) applies rather than the law chosen in the trust agreement for purposes of determining whether a DAPT is protected from the creditors of the settlor. [Dicta is a portion of the judge’s opinion that is not essential to the resolution of the case.  Huber was a bankruptcy and fraudulent transfer…

Advisors Who Don’t Use Out-of-State Trusts: What Their Clients Get

By Steven J. Oshins, Esq., AEP (Distinguished) Most advisors stick to using their own home state’s trust laws and fail to take advantage of other states’ more favorable laws. This would be like forming business entities in your home state rather than going to traditional best states such as Nevada or Delaware. This analogy should put in perspective how much is lost for the client by failing to maximize the use of more favorable trust laws. What This Means for the Clients The clients of advisors who fail to use out-of-state trusts often can’t modify preexisting irrevocable trusts without going…

Three-Year-Old Tiffany Oshins Interviews Daddy About Domestic Asset Protection Trusts

By Tiffany A. Oshins and Steven J. Oshins, Esq., AEP (Distinguished) Three-year-old student Tiffany A. Oshins (“Tiffany”) recently sat down with her father, estate planning attorney Steve Oshins (“Daddy”).  Tiffany interviewed Daddy about asset protection planning and Domestic Asset Protection Trusts. Below are highlights from the interview.  [Daddy helped Tiffany with a lot of her spelling.] Tiffany:  I overhear you talking about asset protection planning all the time.  How do you start this conversation with prospective clients? Daddy:  Many of them come to me specifically for asset protection planning.  So the conversation is simple with them because they already have that…

Why Do Nevada and Delaware Get Most of the ING Trust Business?

By Steven J. Oshins, Esq., AEP (Distinguished) We keep hearing about NING Trusts (Nevada) and DING Trusts (Delaware).  Occasionally, but much less often, we hear about WING Trusts (Wyoming) too. Nevada and Delaware clearly get the vast majority of the ING Trust business.  Wyoming seems to be the next jurisdiction to take a reasonably good chunk of the pie. Is this because these jurisdictions actually have the best laws?  Or is it simply a function of good marketing?  The words “NING”, “DING” and “WING” just roll off the tip of your tongue, eh? Let’s take a close look at ING…

Poll Results: Which Is the Best Trust Jurisdiction?

By Steven J. Oshins, Esq., AEP (Distinguished) In a one-week LinkedIn poll conducted in March of 2023, I asked thousands of people primarily made up of estate planners and financial planners: “Which is the best trust jurisdiction?” Among 5,104 “impressions” (number of times users see the poll question), there were 123 total votes. The permitted responses were limited to Nevada and South Dakota simply because these are so clearly the two best trust jurisdictions and therefore there was no reason to dilute the votes by including additional options. Results The results were as follows: *Nevada           …