Reprinted Courtesy of Leimberg Information Services, Inc. (LISI)
“Alaska, Delaware, Nevada and South Dakota seem to get almost all of the press whenever Dynasty Trusts are mentioned. However, one of the objectives of the Chart is to show that there are other states that are worthy of mention among the greats.
In this author’s opinion, it is a shame that Tennessee and Ohio don’t receive the publicity that they deserve. Unfortunately, the amount of marketing done by each state often skews the belief of the public.”
Steven J. Oshins, Esq., AEP (Distinguished) is an attorney at the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. Steve is a nationally known attorney who was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He is listed in The Best Lawyers in America®. He has written some of Nevada’s most important estate planning and creditor protection laws. Steve can be reached at 702-341-6000, x2 or at email@example.com. His law firm’s web site is http://www.oshins.com.
Steve authors three different annual state rankings charts and one state income tax chart:
- The Annual Domestic Asset Protection Trust State Rankings Chart
- The Annual Dynasty Trust State Rankings Chart
- The Annual Trust Decanting State Rankings Chart
- The Annual Non-Grantor Trust State Income Tax Chart
He now announces the release of the 5th Annual Dynasty Trust State Rankings Chart. Similar to last year’s Chart, this Chart is interactive! If your computer still shows the 4th Annual Chart at this link, then clear your computer’s cache in order for it to be updated or simply email Steve Oshins at firstname.lastname@example.org and request the chart by email.
Here is Steve’s commentary:
The leading Dynasty Trust states have remained relatively the same over the past few years. Just like last year’s Chart, this year’s Dynasty Trust State Rankings Chart includes interactive hyperlinks to help the online user easily locate the perpetuities statutes and certain exception creditor statutes and case law.
There is a new addition to this year’s Chart. A new column was added showing whether the state has a Non-Judicial Settlement Agreement statute. Only 1% weight was given to this variable since it is new and will be judged based on feedback received. That 1% was taken from the Decanting variable (which had its weight reduced from 12.5% to 11.5%) since Non-Judicial Settlement Agreements and Decantings are simply two different methods of making changes.
I. Non-Judicial Settlement Agreements
As noted above, the 5th Annual Dynasty Trust Chart adds Non-Judicial Settlement Agreements (“NJSA”) as a variable.
A NJSA is an agreement among certain interested parties to a trust to resolve conflicts or make changes to the trust. These changes must be changes that a court could properly approve and must not violate a material purpose of the trust. Therefore, the extent that changes can be made is much more limited than those that can be made through decanting.
As an example of a NJSA statute, following is Florida’s version:
FL Stat §736.0111 Nonjudicial settlement agreements.—
(1) For purposes of this section, the term “interested persons” means persons whose interest would be affected by a settlement agreement.
(2) Except as otherwise provided in subsection (3), interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
(3) A nonjudicial settlement agreement among the trustee and trust beneficiaries is valid only to the extent the terms and conditions could be properly approved by the court. A nonjudicial settlement may not be used to produce a result not authorized by other provisions of this code, including, but not limited to, terminating or modifying a trust in an impermissible manner.
(4) Matters that may be resolved by a nonjudicial settlement agreement include:
(a) The interpretation or construction of the terms of the trust.
(b) The approval of a trustee’s report or accounting.
(c) The direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power.
(d) The resignation or appointment of a trustee and the determination of a trustee’s compensation.
(e) The transfer of a trust’s principal place of administration.
(f) The liability of a trustee for an action relating to the trust.
(5) Any interested person may request the court to approve or disapprove a nonjudicial settlement agreement.
II. The Underrated States
Alaska, Delaware, Nevada and South Dakota seem to get almost all of the press whenever Dynasty Trusts are mentioned. However, one of the objectives of the Chart is to show that there are other states that are worthy of mention among the greats.
In this author’s opinion, it is a shame that Tennessee and Ohio don’t receive the publicity that they deserve. Unfortunately, the amount of marketing done by each state often skews the belief of the public.
The Chart is subjective with respect to the weights applied to each variable, yet objective with respect to the material factors that one would use to rank a state. Putting aside any inherent biases that I may have or that the public may perceive that I have, you can’t help but notice that Tennessee is right on the heels of South Dakota and Nevada at the top of the Chart and just ahead of Alaska, another industry heavyweight. And Ohio is right in the mix, just behind Wyoming and just ahead of Delaware and New Hampshire in what might be considered the second-tier, just a few points behind South Dakota, Nevada, Tennessee and Alaska which lead the way.
It may take years for Tennessee and Ohio to be regarded along with Alaska, Delaware, Nevada and South Dakota, but in this author’s opinion that day will come eventually.
This year’s Chart added Non-Judicial Settlement Agreements as an additional column since that additional flexibility may be important to the person selecting an appropriate Dynasty Trust jurisdiction. It wasn’t given much weight, but the weight applied in future years may change depending upon comments received about this extra variable.
The Chart was created to help estate planners select a favorable trust situs for their Dynasty Trusts. There are many good choices and the end user can use the Chart to decide which jurisdiction to use.
Estate Planning Newsletter #2461 (October 10, 2016) at http://www.leimbergservices.