Trust Situs Matters: Delaware No Longer Considered a Top Tier State for Asset Protection Trusts

Nevada, South Dakota, Alaska, and Ohio comprise the top tier trust jurisdictions for asset protection trusts, according to the 4th Annual Domestic Asset Protection Trust State Rankings Chart (see below). The Rankings Chart, an annual ranking of Asset Protection Statutes from across the country published by Nevada attorney Steve Oshins, is an excellent resource for advisors and clients because of the methodical and objective approach to evaluating the factors that impact the effectiveness of a particular state’s asset protection statute such as fraudulent conveyance (look back provision), state taxation on trusts, and if there is an exception for child support and alimony claims.

The chart accentuates the vital importance of considering alternative trust jurisdictions in the wealth and trust planning process to ensure that clients are availing themselves of the most progressive trust laws in the country, particularly in the area of asset protection, which continues to be a very hot topic.

An important factor to consider when looking at asset protection statute states, not considered in Oshin’s chart, is privacy. States have different privacy provisions protecting information contained in a trust from becoming public. Nevada has no privacy provision and, after three (3) years, trust information can become public in Delaware. South Dakota is the only asset protection state that has a total seal on trust information forever. Clearly, this is also an important factor to consider when determining where to place an asset protection trust.

4th Annual DAPT

Download chart in PDF