According to the State Business Tax Climate Index published by the Tax Foundation, Wyoming ranks as the best state to do business in the United States. One of the most important reasons for the lofty ranking is that Wyoming does not have a corporate or an individual income tax. The state also does not tax estates, capital gains or gifts. Wyoming also attracts residents and businesses because the state allows for the creation of a Wyoming Qualified Spendthrift Trust.
What is a Wyoming Qualified Spendthrift Trust?
Also referred to as a Domestic Asset Protection Trust, a Wyoming Qualified Spendthrift Trust gives you the legal right to create a trust and become a beneficiary of the trust. The assets you transfer to this type of trust receive 100 percent protection from creditors and keep assets in the same family for generations to come. This type of trust also protects assets against liabilities and civil court judgments.
Cloud Peak Law Group helps clients establish a Wyoming Qualified Spendthrift Trust to prevent transferring assets to a foreign jurisdiction or an offshore asset protection account.
What is the Cost of Opening a Wyoming Qualified Spendthrift Trust?
The fee charged by family law attorneys to create this type of trust depends on how complicated it is to open the trust. Most clients pay $12,500 for a trust and accompanying private trust company. An attorney at Cloud Peak Law Firm can speak with you during a free consultation to answer every one of your questions and determine if this type of trust is the best financial strategy for you to protect your assets.
What Are the Legal Criteria
to Open This Type of Trust?
If you want to create a Wyoming Qualified Spendthrift Trust, you must follow the general trust formation laws of the state.
You will also need to meet the following legal criteria:
- Appoint one eligible trustee of the trust
- The eligible trustee must reside in Wyoming
- The client is not allowed to become the trustee of the trust
- The client has the legal authority to replace a trustee after opening a trust
- Since the trust is irrevocable, it cannot be amended or revoked by the client
- When establishing the trust, the client must name the beneficiaries
- Trustee possesses the legal power to manage and invest the assets in the trust
- The client can serve as an investment advisor to the trustee
- The client has the right to veto proposed distributions made from the trust
What are the Concerns Associated with Opening a Wyoming Qualified Spendthrift Trust?
Although the advantages outweigh the disadvantages of opening this type of trust, you should be aware of one concern that can have a negative impact on your financial decision.
Conflict of State Laws
There remains doubt about whether the guidelines for opening this type of trust in Wyoming carry the same legal weight in an out-of-state court. Although several states have enacted laws that permit the creation of this type of trust, a majority of states prohibit the establishment of Qualified Spendthrift Trusts. Wyoming Statute Section 4-10-552 states that if an out-of-state court refuses to honor the Wyoming statutes that define a Qualified Spendthrift Trust, then the trustee has the right to resign.
With a team of experienced Wyoming-licensed family law attorneys, Cloud Peak Law Group works closely with clients to determine whether setting up a Qualified Spendthrift Trust makes financial sense. Contact us today to learn more about this type of trust and why it makes sense for clients worldwide.