First Western Trust Laramie and Jackson Hole locations offer special benefits to our clients.
Wyoming does not have a state income tax. Therefore, income generated in a Wyoming situs trust is tax-exempt for Wyoming tax purposes. This is important for clients who reside in states such as California that has a very high personal ordinary income tax rates. A Wyoming trust may also be extremely beneficial when there is an impending large liquidity event — such as sale of a business — that would generate a significant capital gain.
In addition, Wyoming is one of only a few states that have enacted statutes that provide asset protection benefits through the use of a “self-settled trust.” These trusts provide protection from claims of creditors while allowing you to retain certain financial advantages. We work with several Wyoming attorneys who are experts in creating these very sophisticated trusts.
Another advantage offered in the state of Wyoming is the opportunity to create a purpose trust. These trusts are designed for the fulfillment of a specific purpose rather than the traditional trust created for the benefit of a group of named beneficiaries, such as family members. Examples of a purpose trust would be a trust for the maintenance of an art collection or the care of a family pet.
Most states have what is referred to as the Rule Against Perpetuities, which allows a trust to remain in existence for a limited term of years. For clients who want a trust to last for an extremely long period of time for tax or other purposes, Wyoming allows a trust to last for 1,000 years to provide greater asset protection or generation-skipping estate tax benefits for family members.
For more information, read on in our Why Wyoming post.