America’s Most Advisor-Friendly Trust Companies Showcase - Flipbook - Page 16
2026 ADVISOR-FRIENDLY TRUST COMPANIES
Nevada also allows trusts to last
indefinitely, imposes no state income
tax on trust assets, and operates a
strong directed trust statute that limits
the directed trustee’s liability when
following the investment advisor’s
instructions. For clients whose primary
concern is creditor protection, whether
from professional liability, business
risk, or matrimonial dispute, Nevada’s
combination of evidentiary standards
and structural flexibility makes a
compelling case.
The key distinction between Nevada
and South Dakota in the asset
protection context is primarily one of the
statute of limitations: South Dakota’s
two-year limitation period for fraudulent
transfer claims is among the shortest in
the nation, while Nevada’s is somewhat
longer. For clients with existing creditor
exposure, the timing of trust formation
relative to any known or anticipated
claim is a critical planning consideration
that an experienced trust company and
legal team must evaluate carefully.
NEW HAMPSHIRE AND ALASKA:
STRONG ALTERNATIVES WITH
DISTINCT PROFILES
New Hampshire has built a compelling
trust jurisdiction on the foundation
of favorable directed trust statutes,
no state income or capital gains tax
on irrevocable trusts meeting certain
criteria, perpetual trust duration, and
robust asset protection provisions. Its
proximity to the major financial centers
of the Northeast makes it a practical
choice for many advisors and families
in that region who want access to
favorable trust law without establishing
a relationship with a trust company in
the geographic middle of the country.
Alaska was among the first states to
authorize domestic asset protection
trusts in 1997, and it has maintained a
strong framework in the years since. It
is particularly notable for its treatment
of self-settled trusts and for allowing a
grantor to be named as a beneficiary of
an asset protection trust, a feature that
THE ADVISOR-FRIENDLY TRUST STRUCTURE
Conventional trusts lock the advisor out of the relationship, handing
the assets to the trustee to manage. Make sure your clients work with
companies that leave room for you.
GRANTOR
TRUSTEE
ADVISOR
BENEFICIARY
(transfers assets
into trust)
(administers
trust)
(oversees
investments)
(ultimately spends
the money)
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is not universally available and that can
make these structures far more useful
in practice.
THE HIGH-TAX STATE PROBLEM
The flip side of the favorable jurisdiction
landscape is the challenge facing clients
who live in states that either impose
estate taxes at low thresholds, tax
trust income aggressively, or both. The
2026 State Tax Competitiveness Index
places New York at the bottom of all
50 states for the second consecutive
year, with California, New Jersey, and
Connecticut also ranking among the
least competitive. For clients in these
states, the question of trust situs is
not academic. It is a decision with real,
recurring financial consequences.
New York’s estate tax cliff is the
most dangerous example of what an
unfavorable state framework looks like
in practice. As noted in the previous
section, estates that exceed the state
exemption by more than 5% lose the
exemption entirely and are taxed on
the full estate value. For a client with
a $10 million estate in New York, the
difference between careful planning and
inattention is potentially hundreds of
thousands of dollars paid to the state
rather than passed to heirs. The answer
is not necessarily to move, though many
clients in high-tax states are making
exactly that choice. The answer begins
with understanding the options and
structuring around them thoughtfully.
For clients who live in high-tax states
but whose trust assets consist primarily
of income-generating investments or
appreciated securities, moving the
trust situs to a state with no income
tax on nonresident trust assets can
reduce ongoing tax drag significantly.
Trusts administered in South Dakota
may protect income and capital gains
from state income tax exposure even
