Compare Nevada to Other States

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2 THE CASE FOR NEVADA INVESTMENT HALF LIFE Compare Nevada to Other s Discover Nevada s highly ranked trust laws and state tax advantages Dunham Trust Company is based in Reno, Nevada. This location gives us a significant advantage over other trust companies. Read this guide to discover the Nevada advantage: state income tax, no state gift or estate tax, no corporate income tax and no franchise tax One of the preferred states for domestic asset protection trusts It is a dynasty trust state One of the best states for decanting a trust Outstanding privacy laws 2

3 The Case for Nevada Table of Contents Income Taxes on n-grantor Trusts: Under Which Conditions Do They Apply In Each? Asset Protection Trusts: Compare the Top s...8 The Benefits of a Nevada Asset Protection Trust...9 Dynasty Trust Rankings: Compare the Top The Benefits of a Nevada Dynasty Trust...11 Decanting a Trust: Compare the Top s...12 *Click the topic above to be taken directly to it in this document 3

4 3 rd Annual n-grantor Trust Income Tax Chart (Alphabetical) Alabama Taxing Statute Ala. Code (33) Top 2017 Tax Rate 5.00% Alaska *** tax*** 0% *** tax*** Arizona Arkansas California Colorado Connecticut Delaware Ariz. Rev. Stat (5) Ark. Code Ann (a)-(c) Cal. Rev. & Tax. Code Colo. Rev. Stat (10) Conn. Gen. Stat (a)(4)(C)- (D), (a)(5), (a)(6) 30 Del. C. 1601(8)-(9); 30 Del. C Under What Conditions does the Tax a n-grantor Trust? If the trust is set up by the Will of an AL resident or settlor was an AL resident at time trust became irrevocable, and an AL resident is a beneficiary or trustee for more than seven months during the tax year 4.54% If there is at least one AZ trustee 6.90% If the trust is set up by the Will of an AR resident or settlor was an AR resident, and there is an AR trustee 13.30% If the trust has either a CA trustee or a CA non-contingent beneficiary, tax apportioned based on CA vs. non-ca trustees and beneficiaries 4.63% If the trust is administered in CO 6.70% 6.60% Florida *** tax*** 0% *** tax*** Georgia O.C.G.A % Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Haw. Rev. Stat ; Form N-40 Instr. Idaho Rev. and Tax (2) 35 Ill. Comp. Stat.5/1501(a)(20) (C)-(D) Ind. Admin..Code tit.45, r Iowa Admin. Code r (1)-(2) Kan. Stat. Ann , 109(d) Ky. Rev. Stat. Ann. 386B.1-060; Instr. to Form 741 La. Rev. Stat. Ann. 47:300.10(3) Me. Rev. Stat. Ann. Tit. 36, 5102(4)(B)-(C) Md. Code Ann., Tax-Gen (k)(1)(iii) If the trust is set up by the Will of a CT resident or settlor was a CT resident at time property transferred to an irrevocable trust or at the time property transferred to revocable trust that later became irrevocable --- other than for Will transfer, tax is modified fractionally to the extent there are nonresident noncontingent beneficiaries If the trust is set up by the Will of a DE resident, or settlor of trust was a DE resident, or the majority of the trustees are DE residents for more than ½ the year; in all of such cases only if there is a DE beneficiary If there is trust property located in GA or if the trustee is managing funds for the benefit of a resident of GA 8.25% If there is a HI trustee or if the trust is administered in HI, but only if there s a Hawaii beneficiary 7.40% 3.75%* If there are three or more of: (1) Grantor is ID resident; (2) Trust governed by ID law; (3) Trust has real or tangible personal property located in ID; (4) Trust has ID trustee; and/or (5) Administration of trust in ID If the trust is set up by the Will of an IL resident or settlor was an IL resident at time trust became irrevocable --- *te that there is also a 1.50% replacement tax assessed in addition to the regular state income tax 3.23% If the trust is administered in IN 8.98% Depends on relevant facts of each case --- Relevant facts include residence of trustees, location of administration, location of evidence of intangible assets of the trust, etc. --- Must read rules carefully 4.60% If the trust is administered in KS 6.00% If the principal place of administration of the trust is in KY 6.00% If the trust is set up by the Will of a LA resident; or an inter vivos trust set up by resident of any jurisdiction if trust instrument provides that the trust shall be governed by LA law, or if silent then taxed if administered in LA 7.15% If the trust is set up by the Will of a ME resident or settlor was a ME resident 5.75% If the trust is set up by the Will of a MD resident or settlor is a current resident of MD or the trust is principally administered in MD --- Also note the 1.25% to 3.20% county tax 4

5 3 rd Annual n-grantor Trust Income Tax Chart (alphabetical) Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Taxing Statute Mass Regs. Code tit. 830, 62.10(c); Form 2 Instr. Mich. Comp. Laws (1)(c); Form MI-1041 Minn. Stat , Subd. 7b Miss. Code Ann (1); Miss. Form Instructions RSMo (2)-(3) MT Code (14); 2014 MT Form FID-3 at (6) (b)-(c) Top 2017 Tax Rate 5.10% 4.25% 9.85% Under What Conditions does the Tax a n-grantor Trust? If the trust is set up by the Will of a MA resident and there is MA beneficiary; Or if settlor was a MA resident at time of creation of inter vivos trust or at any time during year in which income is computed or who died as MA resident and there is MA beneficiary, but only if MA trustee --- Also note the 12.00% tax for short-term capital gains and gains for sales of collectibles (with 50% income tax deduction for collectibles) If the trust is set up by the Will of a MI resident; or settlor was a MI resident at time trust became irrevocable, unless no MI trustee, no MI assets and no MI beneficiary If the trust is set up by the Will of a MN resident that died post-12/31/1995 or trust that became irrevocable post-12/31/1995; or for pre-1/1/1996 irrevocable trusts if the majority of discretionary investment distribution decisions are made in MN or the books or records located in MN 5.00% If the trust is administered in MS 6.00% 6.90% 6.84% Nevada *** tax*** 0% *** tax*** New Hampshire *** tax*** 0% *** tax*** New Jersey New Mexico New York New York City rth Carolina rth Dakota Ohio NJSA 54A:1-2(o)- (p); Form NJ-1041 NM Stat. Ann (I), (S); NM Tax. & Rev. Dept. N.Y. Tax Law 605(b)(3)-(4) N.Y. Tax Law 1305 N.C. Gen. Stat N.D. Admin. Code (2) Ohio Rev. Code Ann (I)(3) 8.97% 4.90% 8.82% 3.876% If the trust is set up by the Will of a MO resident or settlor was a MO resident at time trust became irrevocable, and a MO resident is a beneficiary on the last day of the tax year If principal place of administration is in MT --- Principal place of administration is the usual place where dayto-day activities carried on by the trustee which is generally trustee s residence or usual place of business If the trust is set up by the Will of a NE resident; or if settlor of inter vivos trust was a NE resident at time such person may no longer exercise the power to revest title to the trust property in himself or herself If the trust is set up by Will of NJ resident or if settlor of a trust was a NJ resident at time of transfer to irrev. trust or at time a rev. trust became irrevocable, but not if no NJ assets, no NJ source income and no NJ resident trustee If the trustee is a NM resident; or if the principal place from which the trust is managed or administered is in NM If the trust is set up by the Will of a NY resident or settlor was a NY resident at time trust became irrevocable or when transfer made to trust, but foregoing doesn t apply if no NY trustees, all corpus outside of NY and all income non-ny sourced; Also, no Incomplete Gift n-grantor Trusts If the trust is set up by the Will of a NY City resident; or if settlor was a NY City resident at time trust became irrevocable or when transfer made to trust; also, no Incomplete Gift n-grantor Trusts 5.499% If there is a NC beneficiary 3.22% 4.997% If the trust has a relationship to the state sufficient to create nexus --- This includes, but is not limited to: (1) If there is a ND beneficiary; (2) If there is a ND trustee; (3) If there are ND situs assets; (4) If there is administration in ND; and/or (5) If the laws of this state are made applicable to the trust If the trust is set up by the Will of OH resident; or if settlor of an inter vivos trust was an OH resident at time trust became irrevocable and at least one of the trust s qualifying beneficiaries is an OH resident during all or some portion of taxable year 5

6 3 rd Annual n-grantor Trust Income Tax Chart (alphabetical) Oklahoma Oregon Pennsylvania Rhode Island South Carolina Okla. Stat. tit. 68, Or. Rev. Stat. Ann (1)(d) 72 P.S., tit. 61, Sec R.I. Gen. Laws (c)(2)-(5) S.C. Code Ann (5) 5.25% If the trust is set up by the Will of an OK resident; or settlor of inter vivos trust was an OK resident at time such trust irrevocable; or when person may no longer exercise the power to revest title to the trust property in himself 9.90% If there is an OR trustee; or if the trust is administered in OR 3.07% 5.99% If the trust is set up by the Will of a PA resident; or if settlor of inter vivos trust was a PA resident at time of creation of trust or at time of transfer to trust If the trust is set up by the Will of a RI resident; or a RI settlor of a revocable trust upon becoming irrevocable; or a settlor of an irrevocable trust if the settlor was a RI resident at time of creation of trust or at time of transfer to trust, but in each of these situations only to the extent that the beneficiaries are RI residents 7.00% If the trust is administered in SC South Dakota *** tax*** 0% *** tax*** Tennessee Tenn. Code Ann (a) 5.00% (int./div. only) If there is a TN beneficiary Texas *** tax*** 0% *** tax*** Utah* Vermont Virginia Utah Code Ann (1)(i) (ii)-(iii) 32 V.S.A. 5811(11)(B) Va. Code Ann % If the trust is set up by the Will of a UT resident; or if a trust is administered in UT 8.95% 5.75% Washington *** tax*** 0% *** tax*** Washington, D.C. West Virginia Wisconsin Taxing Statute D.C. Code ; W. Va. Code (c) Wis. Stat (2), (3), (3m) Top 2017 Tax Rate 8.95% 6.50% 7.65% Wyoming *** tax*** 0% *** tax*** Under What Conditions does the Tax a n-grantor Trust? If the trust is set up by the Will of a VT resident; or if settlor of a trust was a VT resident at time of transfer to irrevocable trust or was a VT resident at the time a revocable trust became irrevocable If the trust is set up by the Will of a VA resident; or if a trust was created by a settlor who was a VA resident; or a trust which is being administered in VA If the trust is set up by the Will of a D.C. resident; or if a trust was created by a settlor who was a D.C. resident If the trust is set up by the Will of a WV resident; or if a trust was created by a settlor who was a WV resident If the trust is set up by the Will of a WI resident; or if settlor of a post-10/28/1999 inter vivos trust was a WI resident at time trust became irrevocable; or if irrevocable inter vivos trust administered in WI pre- 10/29/1999 Important Disclosures: *Utah s law is great for Utah residents, but is ranked low primarily because of its state income tax uncertainty for non-residents. This material is provided for informational and educational purposes only by Dunham Trust Company2 and may not be comprehensive. The information set forth was obtained from Steve Oshins3 of the Law Offices of Oshins & Associates, LLC and does not necessarily reflect the views or opinions of Dunham Trust Company. This information should not be construed as legal, accounting, tax or investment advice from Dunham Trust Company. Please consult with your professional legal and/or tax advisor. Dunham Trust Company is a privately held trust company founded in August It is licensed and regulated by the of Nevada, Department of Business and Industry, Financial Institutions Division. Steve Oshins is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He is rated AV by the Martindale-Hubbell Law Directory and is listed in The Best Lawyers in America. He was inducted into the NAEPC Estate Planning Hall of Fame in 2011 and has also been named one of the Top 100 Attorneys in Worth. Source: Steve Oshins of the Law Offices of Oshins & Associates, LLC as of April Copyright by Steve Oshins. All rights reserved. 6

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8 8th Annual Domestic Asset Protection Trust Rankings Rank Income Tax (10% Weight) Statute of Limitations (Future Creditor) (5% Weight) Statute of Limitations (Preexisting Creditor) (5% Weight) Spouse/ Child Support Exception Creditors (Spouse 3% Weight/ Alimony 1% Weight/ Child Support 1% Weight) Preexisting Torts Exception Creditors/ Other Exception Creditors (5% Weight) Ease of Use Is a New Affidavit of Solvency for Every New Transfer? (7.5% Weight) Fraudulent Transfer Standard (7.5% Weight) Decanting Ranking (5% Weight) Total Score* 1 NV 2 Yrs. 2 Yrs. or 0.5 Yr. Affidavit # SD 2 Yrs. 2 Yrs. or 0.5 Yr. Divorcing Spouse; Alimony (only if indebted at time of transfer) Affidavit # TN (except dividends/ interest on 2 Yrs. 2 Yrs. or 0.5 Divorcing Spouse; Yr. Alimony; Child Support Affidavit # OH (except 1.5 Yrs. 1.5 Yrs. or 0.5 Yr. Divorcing Spouse; Alimony; Child Support Affidavit (With Exceptions) # MI (except 2 Yrs. 2 Yrs. or 1 Yr Divorcing Spouse Affidavit (With Exceptions) # MO (except Missouri source income) /U.S. to ex or 1 Yr. Alimony; Child Support tent state/federal law provides Affidavit # DE (except or 1 Divorcing Spouse; Yr. Alimony; Child Support Preexisting Torts Affidavit # AK or 1 Yr. Affidavit # RI or 1 Yr. Divorcing Spouse; Alimony; Child Support Preexisting Torts Affidavit # WY or 1 Yr. Property Listed on app. to obtain credit - but only as to that lender Affidavit # NH (except dividends/ interest on or 1 Yr. Divorcing Spouse; Alimony; Child Support Preexisting Torts Affidavit Limited clear and convinc- #4 ing evidence standard 12 HI (except 2 Yrs. 2 Yrs. Pers. Injury; 6 Yrs. Contract Preexisting Torts/ Certain Lenders/ Hawaii Tax Affidavit Limited clear and evidence standard ne 70 2 Yrs. 2 Yrs. Pers. Divorcing Spouse; Injury; 0.5 Alimony; Child Support Yrs. Contract Preexisting Torts, / Criminal Restitution/ Up to $1.5MM if no $1MM Umbrella Policy Affidavit ne Affidavit Missing clear and ne 13 (Tie) MS Yes Divorcing Spouse Child Support Divorcing Spouse; Alimony; Child Support (Tie) UT Yes ne 2 Yrs. or 1 Yr. (also 120day mailing/ publication option) NR4 OK (except or I Yr. Child Support Must be majority Oklahoma assets Affidavit ne NR NR4 VA Yes ne 5 Yrs. Child Support Creditor who has provided services to protect trust/ U.S./city, etc. Affidavit #14 NR NR4 WV (except ne Affidavit Missing clear and evidence standard ne NR 8

9 THE CASE FOR NEVADA INVESTMENT HALF LIFE 8th Annual Domestic Asset Protection Trust Rankings Benefits of a Nevada Asset Protection Trust state income tax on trust accumulated income that is not distributed, depending on Trust type. state capital gains tax on trust capital gains, depending on Trust type. state estate tax for Nevada residents. One of the preferred states for Asset Protection Trusts, which are set up to avoid creditor claims against the grantor. One of the leading states for Dynasty Trusts due to 365-year statutory life coupled with other benefits named herein. corporate income tax and no franchise tax. We believe Nevada has excellent privacy laws. Important Disclosures: *Total score was calculated by giving the remaining 50% weight to the states statute. Utah s law is great for Utah residents, but is ranked low primarily because of its state income tax uncertainty for non-residents. 1 This material is provided for informational and educational purposes only by Dunham Trust Company Ridge Street, Suite Reno, NV and may not be comprehensive. The100, information set forth was obtained from Steve Oshins3 of the Law Offices of Oshins & Associates, LLC and does not necessarily reflect the views or opinions of Dunham Trust

10 6 th Annual Dynasty Trust Rankings Rank Perpetuities Statute Rule Against Perpetuities (35% weight) Income Tax (25% weight) Third-Party Spendthrift Trust Provision Effective Against Divorcing Spouse/ Child Support (Divorcing Spouse 7.5% weight/ Child Support 2.5% weight) Discretionary Trust from Divorcing Spouse/ Child Support (7.5% weight) Domestic Asset Protection Trust Ranking (10% weight) 1 Trust Decanting Ranking (12.5% weight) 2 n- Judicial Settlement Agreement Statute (1% weight) Total Score 1 SD 2 NV 3 TN 4 AK 5 WY 6 RI 7 OH DE IL MO NH 12 FL SD Codified L NV Rev Stat TN Code (f) AK Stat WY Stat RI Gen L Ohio Rev Code (B) and (C) 2 DE Code ILCS 305/3 MO Rev Stat NH Rev Stat 564:24 FL Stat (2)(f) Perpetual #2 #1 Yes years #1 #2 Yes years Perpetual/ 1,000 years if exercise power of appointment (except dividends/ interest on 1,000 years Perpetual Perpetual/ 1,000 years if exercise power of appointment Perpetual for personal property/ 110 years for real estate Perpetual Perpetual Perpetual #3 #3 Yes 96 #8 (except (except (except (except (except resident) (except resident) 360 years Divorcing spouse = Child Support = t (WY Stat (b)) #10 #9 Divorcing spouse = t Child support = t (Ohio Rev Code (B)(1)) Divorcing spouse = t Child support = t (Garretson v. Garretson (1973)) Divorcing spouse = Child Support = t (735 ILCS 5/ codifying In re Matt (1985)) Divorcing spouse = t Child support = t (MO Rev Stat (2)) Divorcing spouse = t Child support = t (NH Rev Stat 564-B:5-503(b)(1)-(2)) Divorcing spouse = t Child support = t (FL. Stat (2)(a) codifying Bacardi v. White (1985)) #7 #10 #19 94 Yes #4 #6 Yes 85.5 #7 ne #6 Writ of garnishment for spouse, former spouse, child support (FL Stat (3); Berlinger v. Casselberry (2013)) #11 ne #5 Yes 84.5 #7 #10 Yes 84.5 Yes 83 #4 Yes 83 #25 Yes 63 Source: Steve Oshins, Law Offices of Oshins & Associates3 10

11 THE CASE FOR NEVADA INVESTMENT HALF LIFE Benefits of a Nevada Dynasty Trust A Nevada Dynasty Trust allows you to pass your assets to both existing children and grandchildren and to generations and descendants not yet born. A Nevada Dynasty Trust has many advantages: It allows you to establish a 365-year legacy for your future descendants. state income tax on undistributed Trust income. Potential protection from creditors. When properly set-up, it can allow you to establish the Trust without the burden of estate, gift, and generation-skipping transfer tax. You can also use a Nevada Dynasty Trust to encourage each generation to continue to focus on areas that may be important to you. Some examples are: Encouraging each generation to contribute to society by tying distributions to certain behaviors. These Trusts can be used to provide a source of funding for the education of as yet unborn generations. To create, in essence, a family bank that could make loans, enabling your descendants to begin a business or purchase a home. A Nevada Dynasty Trust is an excellent way to provide a benefit not only for your children or grandchildren, but for generations to come. 11

12 4 th Annual Trust Decanting Rankings Chart Rank Has Decanting Statute? Can Decant Trust with Ascertained Standard? tice to Beneficiaries? Can Decant Trust with Ascertainable Standard into Discretionary Trust? Can Remove Mandatory Income Interest? Allow Power of Appointment in 2nd Trust to Bene fbo n-bene? Can Accelerate Remainder Bene s Interest? Dynasty Trust Ranking 1 Domestic Asset Protection Trust Ranking 2 Total Score 60%* 1 SD Yes Yes Yes Yes Yes #1 # NV ; SB 484, Sec. 57 Yes Yes Yes Yes Yes #2 # TN (b)(27) 4 NH 564-B:4-418 Yes Yes Yes Yes Silent, except charitable trusts Yes Yes Silent #3 #7 #3 93 # DE 12, 3528 Yes Yes Yes #7 # OH Yes Yes Yes Yes #6 # AK IL ; ILCS 5/16.4 Yes Yes, except after first trust would have ended Yes Yes Yes Yes Silent #4 #9 9 IN Yes Yes Yes Silent Silent Unranked # t t MO Yes Yes, only to beneficiaries of second trust Yes Silent Yes Unranked # WY (a) (xxviii) (very short) Yes Yes Silent Silent Silent #5 # SC A Yes Yes Yes Yes Unranked t TX to VA Yes Yes Yes Yes Yes Yes Unranked, except if court approval Yes Unranked t # CO Yes Yes Yes Unranked t KY Yes Yes Yes Unranked t NM HB 280 Yes Yes Yes Unranked t NC 36C Yes Yes Yes Unranked t 70 *Weighting 12

13 4 th Annual Trust Decanting Rankings Chart Rank Has Decanting Statute? Can Decant Trust with Ascertained Standard? tice to Beneficiaries? Can Decant Trust with Ascertainable Standard into Discretionary Trust? Can Remove Mandatory Income Interest? Allow Power of Appointment in 2nd Trust to Bene fbo n-bene? Can Accelerate Remainder Bene s Interest? Dynasty Trust Ranking 1 Domestic Asset Protection Trust Ranking 2 Total Score 60%* 19 RI Yes Yes Silent Silent Unranked # AZ Yes Yes Silent Silent Unranked t 20 MI a/ a Yes Yes Silent Unranked t MN Yes Yes, except after first trust would have ended Unranked NY Yes Yes Yes Unranked WI Yes Yes Silent Unranked 25 FL Yes Silent Silent *Weighting #10 t t t t 63.5 Important Disclosures: This material is provided for informational and educational purposes only by Dunham Trust Company 2 and may not be comprehensive. The information set forth was obtained from Steve Oshins 3 of the Law Offices of Oshins & Associates, LLC and does not necessarily reflect the views or opinions of Dunham Trust Company. This information should not be construed as legal, accounting, tax or investment advice from Dunham Trust Company. Please consult with your professional legal and/or tax advisor. 1 Utah s law is great for Utah residents, but is ranked low primarily because of its state income tax uncertainty for non-residents. 2 Dunham Trust Company is a privately held trust company founded in August It is licensed and regulated by the of Nevada, Department of Business and Industry, Financial Institutions Division. 3 Steve Oshins is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He is rated AV by the Martindale- Hubbell Law Directory and is listed in The Best Lawyers in America. He was inducted into the NAEPC Estate Planning Hall of Fame in 2011 and has also been named one of the Top 100 Attorneys in Worth. 4 The Domestic Asset Protection Trust Ranking column is based on the 6th Annual Domestic Asset Protection Trust Rankings Chart created in April 2015 at 5 The Trust Decanting Ranking column is based on the 2nd Annual Trust Decanting Rankings Chart created in January 2015 and updated in February 2015 at This Dynasty Trust Rankings Chart created in October Original Dynasty Trust Rankings Chart created in October 2012.CCopyright by Steve Oshins (soshins@oshins.com / / (702) , ext. 2). All rights reserved. 6 NR = t. The states that received an NR have issues that are not appropriately weighted under the methodology used and are bottom tier states. Dunham Trust Company is a privately held trust company founded in August, It is licensed in the s of Nevada and Colorado and is regulated by the of Nevada, Department of Business and Industry, Financial Institutions Division. Source: Steve Oshins of the Law Offices of Oshins & Associates, LLC as of April Copyright by Steve Oshins. All rights reserved. 13