Wyoming, often associated with its vast open spaces, National Parks, and wildlife, is increasingly acknowledged as a leading trust jurisdiction. The state has implemented legislation that positions its trust laws as some of the most progressive and flexible in the US. These laws provide families with a diverse array of choices for structuring their trusts, allowing them to tailor their estate plans according to their unique needs and goals.
Asset Protection Trust
Wyoming offers the establishment of asset protection trusts, which safeguard assets from creditors, lawsuits, and other potential threats. An asset protection trust allows the grantor to establish a trust for the benefit of other beneficiaries, such as family members or future generations, while providing a legal structure that helps safeguard their wealth and maintain control over their assets. Additionally, if certain criteria are met, Wyoming's trust laws allow for potential state income tax savings.
Blind Trust
The state also allows for the creation of blind trusts, where the grantor and the beneficiaries are intentionally kept unaware of the trust's assets and how they are managed. The purpose of a blind trust is to create a level of separation and confidentiality between the trust's assets and the individuals involved, ensuring that the grantor and beneficiaries are shielded from conflicts of interest or potential biases. Blind trusts are often used in situations where there is a need to maintain impartiality, such as in politics or high-profile positions. Wyoming's emphasis on privacy and confidentiality makes it an ideal jurisdiction for those seeking to create blind trusts to protect their assets and maintain confidentiality.
COIN Trust
Short for Crypto Optimized Irrevocable Non-grantor Trust, COIN Trusts are specifically designed for individuals who wish to incorporate digital assets into their estate planning and wealth management strategies. Two Ocean Trust introduced the COIN Trust to address the challenges presented by crypto ownership and succession planning. COIN Trusts allow individuals to integrate digital assets into their broader estate planning strategies, ensuring seamless wealth transfer while benefiting from Wyoming’s digital asset property laws, tax advantages, and enhanced privacy and asset protections.
Directed Trust
Wyoming directed trusts allow for the division of responsibilities and roles among multiple parties engaged in trust administration and management. This framework empowers the grantor or designated individual with specialized knowledge to exercise greater control over investment decisions. Directed trusts provide a more personalized approach to trust administration, allowing individuals to make decisions that align with their unique goals, investment strategies, or family dynamics.
Dynasty Trust
Wyoming dynasty trusts allow for the efficient transfer and preservation of wealth across multiple generations. This structure takes advantage of Wyoming’s favorable trust laws and tax advantages for up to 1,000 years. The key feature of a Dynasty Trust is that it removes assets from the transfer tax system, which includes estate taxes, gift taxes, and generation-skipping transfer taxes. By doing so, trust assets avoid being subject to these taxes for several generations.
Modification Statutes
Wyoming provides flexible methods for modifying, migrating, and decanting trusts. These statutes provide individuals and families with flexible methods to make changes to the terms and provisions of their trusts.
Trust Modification: Wyoming allows for the modification of trusts through court proceedings or through nonjudicial means. This flexibility enables the grantor, beneficiaries, or other interested parties to seek modifications to various aspects of the trust, such as trustee powers, distribution provisions, or administrative provisions.
Trust Migration: Wyoming's trust laws also provide mechanisms for migrating trusts from one jurisdiction to another. This allows individuals or families to move their trusts to Wyoming while maintaining the integrity and terms of the trust. Trust migration may be beneficial for taking advantage of Wyoming's favorable trust laws and tax environment.
Trust Decanting: Decanting refers to the process of distributing the assets of an existing trust into a new trust with modified terms. Wyoming's decanting statutes provide a framework for trustees to decant trusts under specific conditions and procedures. This allows trustees to adjust the terms of an irrevocable trust to better meet the changing needs or circumstances of the beneficiaries.
Beneficiary Changes: Wyoming's trust modification laws allow for the addition or removal of beneficiaries from a trust. This provides flexibility for the grantor or other interested parties to update the list of beneficiaries based on changing circumstances or family dynamics.
Privacy
Wyoming is known as a jurisdiction that values and protects individual privacy. The state's trust laws prioritize confidentiality by ensuring that trust details, including information about grantors, beneficiaries, and trust assets, are not part of the public record. Moreover, Wyoming does not require trusts to be disclosed or registered with any registry, further safeguarding the privacy of trust information.
Private Trust Company (PTC)
Wyoming PTCs are family-owned trust companies that bring together the expertise and reliability of a professional fiduciary with the active participation and control of family members. PTCs act as the central entity for overseeing family wealth across generations and offer trust and investment services to family members, including spouses and future descendants. Families can personalize their estate planning strategies to align with specific objectives, benefiting from favorable legal frameworks, tax advantages, and enhanced privacy and asset protections offered by Wyoming.
Self-Settled Trust
A self-settled trust is a structure where the grantor is also a discretionary beneficiary. One of the key features of a Wyoming self-settled trust is its asset protection benefits. By placing assets into a Wyoming self-settled trust, the grantor can shield those assets from future creditors or legal claims. Wyoming is one of a few states that allow the establishment of self-settled trusts with asset protection features.
Silent Trust
A Wyoming silent trust includes provisions directing the trustee to withhold certain information or to keep the existence of the trust entirely concealed from the beneficiaries. The purpose of a silent trust is to maintain privacy and confidentiality regarding the trust's operations, assets, and decisions made by the trustee. This can be desirable if the grantor wishes to keep details of the trust confidential for various reasons, such as preserving family dynamics, protecting sensitive information, or maintaining privacy in financial matters.
Statutory Trust
A Wyoming statutory trust is a legal entity typically created for investment purposes, such as holding and managing real estate assets or investments in securities. The trustees are responsible for making investment decisions and managing the trust's assets in accordance with the trust agreement and applicable laws. Like other types of trusts, a Wyoming statutory trust offers limited liability protection to its trustees and beneficiaries. In addition, Wyoming statutory trusts are generally treated as pass-through entities for tax purposes.
Tax Benefits
Wyoming does not impose taxes on income, capital gains, dividends, or interest income making it a top situs for managing generational wealth. Furthermore, Wyoming does not impose any gift or estate tax, providing additional tax advantages for wealth transfer and estate planning. These tax benefits may be extended to non-residents who place assets in a Wyoming non-grantor trust.
WING Trust
Short for Wyoming Incomplete-gift Non-grantor Trust, a WING trust is an irrevocable trust primarily utilized as an asset protection and state income tax tool during a grantor’s life. As an incomplete gift, the assets within a WING are included in the grantor’s estate upon passing. However, unlike many other trust structures, the grantor is able to retain beneficial interest in the trust’s assets. WINGs are particularly suited for low basis assets and for grantors who will eventually relocate to a jurisdiction with lower taxes.
Conclusion
Wyoming's emergence as a premier trust jurisdiction is driven by its commitment to flexibility and innovation. With a wide range of trust options, tax advantages, and enhanced privacy and asset protections, Wyoming stands as an exceptional choice for those seeking to secure their assets and preserve their wealth across generations.
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About the Authors
Cassie Hoffman is Head of Trust Services for Two Ocean Trust a Wyoming Chartered Trust Company based in Jackson Hole providing a full range of trust and investment capabilities to ultra high net worth families and foundations. Cassie has 18 years of experience as a corporate trustee and as a director and officer of numerous private trust companies.
With over three decades of experience in financial services, Joel Revill serves as Chief Executive Officer of Two Ocean Trust. Prior to co-founding the firm, Joel was a Portfolio Manager at Citadel a $62 billion alternative investment manager. Joel serves as Selection Panel Chair for Wyoming's Investment Funds Committee which oversees the state's $26 billion sovereign funds. He was appointed by Governor Mark Gordon to the Wyoming Blockchain Select Committee which has created over thirty groundbreaking laws addressing financial technology and digital assets. Joel was also appointed by the Governor, Treasurer, and State Auditor to the Wyoming Stable Token Commission overseeing the first ever state-issued stable token. Joel has served on numerous boards for the firm's private trust company clients as well as non-profit organizations nationally.
About Two Ocean Trust
Two Ocean Trust was founded to serve private clients whose assets are multi-generational. We provide investment management and trust services to ultra-high net worth individuals, private family trust companies, and foundations. Based in Jackson Hole, Two Ocean Trust is uniquely positioned to provide access to Wyoming's tax advantages, modern trust laws, and enhanced privacy and asset protections.
