The adoption of the Alaska Trust Act in 1997 established Alaska as the first state to allow for self-settled or domestic asset protection trusts. Since then, Alaska and Nevada have continued to pass innovative statutes that promote unique trust planning opportunities. Peak Trust Company remains closely involved in the continuing development of trust law in the jurisdictions in which it operates.
Alaska and Nevada have similar statutes and are both recognized as leading trust jurisdictions. Among other advantages, both states allow self-settled trusts, permit perpetual trusts, and impose no state income tax on trusts.* The choice between them comes down to what specifically a grantor is trying to accomplish with the trust, along with the preferences of the client and the attorney.
What makes a “top-tier” jurisdiction?
In 1997, Alaska was the first state to modernize its laws to provide better estate planning options and attract national trust business. Since 1997, both Alaska and Nevada have made further enhancements to trust statutes and today are considered to be two of the leading states in the field. Currently, there are four “top-tier” jurisdictions that compete for the majority of trust business nationwide. Leading industry opinions vary as to which of the “top four” is the best, but all agree that Alaska, Nevada, Delaware, and South Dakota are the preeminent trust planning jurisdictions in the nation today.
Any state needs all three of these elements to be considered a competitive “top-tier” jurisdiction:
- The state must permit long-term trusts and other modern trust planning techniques such as self-settled trusts.
- The state cannot impose an income or similar tax on trusts located in the state.*
- The state must have a number of sophisticated professionals able to service the industry.
Alaska and Nevada each have all these basic requirements and much more.