• 07
  • July
    2010

Florida estate planning lawyers are noticing more and more states relaxing their trust laws in order to encourage people to set up trusts there.

For instance, Alaska, Delaware, Nevada, New Hampshire, South Dakota, and Wyoming have made their trust laws more attractive to residents and nonresidents who want to minimize taxes and shield assets from creditors.

The first thing you should do when you are thinking about setting up a trust is to discuss with a Florida estate planning attorney what you are trying to accomplish. With any trust, you are going to set up an agreement for an individual or institution (the trustee) to manage assets for your beneficiaries. Most states will require that you choose an in-state trustee.

States that don't tax trust income include:

Alaska, Nevada, and South Dakota.

Delaware and New Hampshire do not tax trust income for out-of-state beneficiaries.

Many states and the District of Columbia have modified their laws to allow trusts to last for long periods of time. In some states, trusts can grow indefinitely. All during that time, assets can be accummulated free of estate tax, gift tax, and generation-skipping tax.

A factor to consider when choosing a state for an out-of-state trust is the flexibility to modify trusts and to move assets between trusts. Also, it is important for local state courts to have a good reputation for understanding of trust law.