Washington has a sophisticated trust code and a strong legal framework for fiduciary administration. While for most clients, a Washington-situs trust remains the right solution, clients with certain planning objectives—particularly around privacy, asset protection, flexibility, and dynasty planning—may wish to consider a Nevada trust administered by a professional, independent trustee.
Why Nevada? Washington’s Trust Code is already robust. What’s the real difference?
Washington offers excellent fiduciary standards and flexibility, but Nevada provides Tier 1 statutory advantages in several key areas. Most notably, Nevada imposes no state income tax on trust income, while Washington’s capital gains tax regime (and evolving tax landscape) can create uncertainty for certain trust structures and transactions. For clients anticipating liquidity events or substantial portfolio turnover, Nevada’s tax neutrality is often a decisive factor.* Additionally, Nevada permits 365-year dynasty trusts, significantly longer than Washington’s perpetuities framework, allowing families to extend transfer-tax planning across many generations with greater certainty.
* Using NINGs to eliminate federal tax on QSBS may result in eliminating Washington capital gains excise tax.
Can an existing Washington trust be decanted into a Nevada trust without court involvement?
In many cases, yes. Nevada’s decanting statutes are among the most flexible in the country. Where a trustee has discretionary distribution authority, it is often possible to decant assets into a new Nevada trust to modernize administrative provisions, enhance asset protection, or extend the trust term*— frequently without judicial approval. This approach can reduce cost, preserve privacy, and avoid unnecessary procedural friction while remaining consistent with fiduciary duties.
* Subject to GST considerations
Can you accommodate Directed Trusts? Can my client keep their existing RIA?
Yes — this is a distinctive advantage of Northwest Trustee, as well as a core strength of Nevada trust law. Nevada’s Directed Trust statutes explicitly allow for the bifurcation of fiduciary duties. As Administrative Trustee, we handle trust administration, reporting, distributions, and compliance, while the client’s chosen RIA or Investment Committee retains full investment authority. This structure preserves advisor relationships, limits expanded fiduciary liability exposure, and keeps each party operating squarely within their expertise.
What’s your view on Nevada Incomplete Gift Non-Grantor (NING) trusts for Washington residents?
NINGs are one of the primary reasons we sought a Nevada charter. While Washington’s capital gains tax law provides a NING is taxed the same as a grantor trust, NINGs are still used to multiply the QSBS exemption. Furthermore, a lifetime QTIP is a successful option for clients with strong marriages. We provide the Nevada situs, independent trustee, and administrative expertise to support non-grantor status.*
* These structures require careful coordination with tax counsel and are evaluated case by case depending on facts and current law.
How does Nevada’s Domestic Asset Protection Trust compare to other jurisdictions?
Nevada is widely regarded as one of the strongest DAPT jurisdictions in the US. Key advantages include no exception creditors, a two-year statute of limitations on fraudulent transfer claims, and a proven judicial track record in favor of protection. When properly structured and funded well in advance of claims, Nevada DAPTs can provide a high degree of asset protection relative to alternatives.