Directed Trusts, only available in a handful of states across the country, including South Dakota, have drastically changed the trust world by putting control back into the hands of settlors, beneficiaries, and their advisors. Through bifurcating liability, the directed trust model creates a legal framework allowing trustees and beneficiaries to work with asset managers and independent trust companies of their choosing.
The Insurance Premium Tax is a commonly missed state tax planning opportunity when utilizing insurance, particularly private placement insurance (PPLI). Essentially, the Insurance Premium Tax is a tax that is levied upon insurers, both domestic and foreign, for the privilege of engaging in the business of providing insurance in the state. The tax is passed to consumers through the payment of insurance premiums and it varies dramatically among states. Significant tax savings can be realized simply by purchasing a policy within a trust sitused in a state with a low Insurance Premium Tax such as South Dakota. Most states in the country have an Insurance Premium Tax between 150 and 250 basis points. Nevada = 350 bps New York = 200 bps Pennsylvania = 200 bps California = 233 bps Wyoming =75 bps While Delaware boasts 0 bps on policies owned in trust, it is very important to note that policies held within an LLC owned by the trust (which is the typical structure) are subject to a 200 bps Insurance Premium Tax. South Dakota has the LOWEST Insurance Premium Tax in the nation at 8 bps that applies BOTH to policies owned directly by a trust AND a policy within an LLC owned within trust. This powerful state tax planning opportunity involving insurance, available by simply selecting a low premium tax jurisdiction like South Dakota, is particularly compelling when considered in conjunction with the fact that South Dakota… Is generally regarded by most practitioners and academics, including Steve Oshins, as being the best Dynasty Trust state and having the strongest Decanting Statute in the nation. Unequivocally has the most robust privacy laws in the country, as pointed out by an article appearing in the January 2018 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the author noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.” Is one of only two states with a Community Property Trust, a compelling tax planning tool for spouses. Is the only state in the country with the Family Advisor, referred to as a “Trust Protector Light.” For more information on the Insurance Premium Tax and how this tax planning strategy can work in your favor, please reach out to us via our contact page.
Bridgeford Trust is very proud and honored to announce that we have been named a finalist for WealthManagement.com’s 2018 Industry Awards. WealthManagement.com, considered the leading resource for wealth advisors and planners, is the only awards program of its kind to honor outstanding achievements by companies and organizations that support financial advisor success. The 2018 Industry Awards received a record number of nominations – this year, more than 600 entries were received from nearly 250 companies. David A. Warren, Bridgeford Trust Co-Founder, President, and CEO states: “Bridgeford Trust is thrilled to be recognized this year, among many excellent providers, for our leadership and outstanding work with domestic and international families seeking sophisticated and progressive trust solutions.”
An Incomplete Non-Grantor Trust (“ING”) is a powerful vehicle, particularly for low cost basis assets with a contemplated future sale, that potentially eliminates state income/capital gain tax while taking advantage of Domestic Asset Protection and other progressive modern trust laws. It is an incomplete gift that never leaves the settlor’s estate, which means there is no gift tax. In addition, the trust has a Non-Grantor status, meaning the income is taxed at the trust level, not the individual level, thereby potentially avoiding state income tax on assets within a trust if sitused and properly administered in a no-tax jurisdiction.
On June 1st, Bridgeford Trust will be back in Florida to sponsor STEP Miami’s 9th Annual Summit! The Summit, taking place at the Four Seasons Hotel in Miami, is an excellent opportunity to review the latest issues concerning international private client planning and includes presentations by leading professionals in the area. Last year’s Summit attracted more than 250 professionals from around the globe, so you won’t want to miss this one!
Bridgeford Trust is excited to be sponsoring the STEP International Trust and Estate Planning Forum: Around the Globe in 2018, presented by STEP Los Angeles. Taking place on Thursday, May 3rd and Friday, May 4th in Laguna Beach, CA, this much anticipated event presents the latest issues for international private client planning.
Given recent changes in the federal tax code, state tax planning and selecting the proper U.S. trust jurisdiction in the planning process is more important now than ever. Establishing a trust in a state that does not have an income tax, such as South Dakota, provides a compelling potential tax planning opportunity for trustees and beneficiaries. State capital gains on low cost basis assets may be avoided upon sale, trust assets can grow free of state income tax over multiple generations, and federal estate tax can be avoided forever in dynasty trust states such as South Dakota.
Bridgeford Trust is very pleased to be sponsoring Ave Maria School of Law’s 5th Annual Estate Planning Conference on April 27, 2018 in Naples, Florida. The Ave Maria School of Law Estate Planning Conference offers estate planning professionals a unique professional development and networking opportunity and includes lectures and panel discussions designed to examine current developments in estate planning and to strengthen the practitioner’s knowledge and application of estate planning techniques.
Given recent changes in the tax code, concerns around asset protection and privacy, and the huge influx of international families coming to the United States, selecting the proper U.S. trust jurisdiction in the planning process is more important now than ever. Below is an objective and well-researched chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on areas and planning nuances that distinguish South Dakota as the superior trust jurisdiction in the overall analysis. Click here or on the image below to view the chart in PDF format.
Bridgeford Trust is very pleased to be sponsoring the 14th Annual International Estate Planning Institute, presented by The New York State Bar Association and The Society of Trust and Estate Practitioners USA (STEP USA). Taking place on Thursday, March 22nd and Friday, March 23rd at the Crowne Plaza Times Square in NYC, this Institute is a much anticipated annual event at which trust and estate practitioners, bankers, and accountants from around the world gather to hear leaders in their fields exchange ideas and discuss developments regarding cross-border planning with a U.S. component.