An Incomplete Non-Grantor Trust (“ING”) is a powerful vehicle, particularly for low cost basis assets with a contemplated future sale, that potentially eliminates state income/capital gain tax while taking advantage of Domestic Asset Protection and other progressive modern trust laws. It is an incomplete gift that never leaves the settlor’s estate, which means there is no gift tax. In addition, the trust has a Non-Grantor status, meaning the income is taxed at the trust level, not the individual level, thereby potentially avoiding state income tax on assets within a trust if sitused and properly administered in a no-tax jurisdiction.
Watch this video to learn when to use the ING and to hear more about other state tax planning opportunities that exist by simply creating or moving a trust to a no-tax jurisdiction like South Dakota.
For more information on INGs and how this tax planning strategy can work in your favor, please reach out to us via our contact page.
As an independent, full service trust company with South Dakota Trust powers, Bridgeford Trust Company provides independent, collaborative, and world class multi-family office and third party fiduciary services to domestic and international families.
Bridgeford Advisors, Inc. is a legally distinct sister company of Bridgeford Trust Company and coordinates consultative, planning, business development, and marketing support at locations in New York, California, Florida, South Dakota, and Pennsylvania.