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…
How to Work Around California’s Anti-ING Trust Legislation
By Steven J. Oshins, Esq., AEP (Distinguished) It finally happened. California passed SB 131 in its 2023 legislative session which, among other things, sadly contains a provision treating all so-called Incomplete Non-Grantor Trusts (“ING Trusts”) as grantor trusts taxed to the settlor. This takes away a key tool planners have used for many years to reduce California state income tax on taxable income not sourced to California. The legislation is effective retroactive to January 1, 2023, so many California residents were wrongly punished for following the law that existed prior to the date this legislation passed. It remains to be…
SECURE 2.0 Act Enhances Special Needs—See Through Trust Planning
By Edwin P. Morrow, III, J.D., LL.M., MBA, CFP®, CM&AA® and Nancy H. Welber, J.D., ACTEC Thanks to the generosity of Leimberg Information Services, we are pleased to provide you this recently published article on LISI. EXECUTIVE SUMMARY Section 337 of the Secure 2.0 Act, effective in 2023, provides a welcome, though very limited in scope, enhancement to special needs trusts designed to receive retirement benefits and qualify as see through trusts under the Secure Act provision for applicable multi-beneficiary trusts (AMBTs). The new provision provides that most charities can now be remainder beneficiaries after the death of a disabled…
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…
9th Annual Non-Grantor Trust State Income Tax Chart Released!
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….
Steve Oshins Releases the 8th Annual Non-Grantor Trust State Income Tax Chart!
By Steven J. Oshins, Esq., AEP (Distinguished) State income tax avoidance planning has become a necessary area of expertise for all estate planners. After all, how can an estate planner design a trust without first analyzing the income tax effects of selecting residents of different states as trustees? The 8th Annual Non-Grantor Trust State Income Tax Chart The 8th Annual Non-Grantor Trust State Income Tax Chart is a summary of the state income tax rules for non-grantor trusts and highest state income tax rate from state to state. It simplifies the analysis by summarizing each state’s taxing rules and providing…
Is 2021 the Greatest Year Ever for Estate Planners?
By Steven J. Oshins, Esq., AEP (Distinguished) History repeats itself. First, there was the fiscal cliff in 2012. Then there was the “threat” of a Biden presidency and an upcoming tax act in 2020. Now we are living through the “threat” of an upcoming tax act as we near the end of 2021. Each of these three years has something in common — a supply/demand ratio that made it impossible for many potential clients to be able to find a capable estate planning attorney to take on their work and be able to complete it by year-end. YEAR 2012 In…
NING Trusts for California Residents: “Rumors of My Death Have Been Greatly Exaggerated”
By Steven J. Oshins, Esq., AEP (Distinguished) Late last year, the California Franchise Tax Board announced that it was planning to bring legislation to abolish the use of Incomplete Gift Non-Grantor Trusts, otherwise known as “ING Trusts”. The two states where most of these trusts are established are Nevada (“NING Trusts”) and Delaware (“DING Trusts”). However, since these trusts are non-grantor Domestic Asset Protection Trusts, this article will assume that the draftsman would select Nevada which is generally considered the number one asset protection trust jurisdiction. The legislation was to be effective for any taxable income earned on or after…
Saving State Income Taxes: NING Trusts and Completed Gift Non-Grantor Options
By Steven J. Oshins, Esq., AEP (Distinguished) Prior to the Trump Tax Act, state income taxes paid were deductible against federal income tax. However, the Trump Tax Act limits the amount of the federal income tax deduction for state income taxes paid, real property taxes paid and sales taxes paid to a cumulative (yes, cumulative!) total of $10,000 per year. The $10,000 is used up for property taxes only for many of our clients. Therefore, state income taxes paid are essentially no longer deductible! This is why state income tax avoidance planning has arguably become the hottest area of estate…