David Warren, President/CEO
Bridgeford Trust Company
Daniel Matarrese, Tax Senior Manager
McKonly & Asbury
A Comprehensive...
“The choice of a state in
which to establish a trust
is as critical as the
decision to create one.”
Elizabeth Mathieu,
Pre...
• Trust laws vary significantly from state to state.
• A few states are “in a race” to establish the most
progressive laws...
• Asset Protection
• Taxation
• Privacy Rules
• Rule Against Perpetuities
• Modern Trust Laws
What are the Factors Conside...
• Hot topic over the past 10 years and it is not going away.
• Very compelling planning tool for high risk individuals
and...
• Self Settled Trust that protects assets from
creditors (including future spouse).
• Strategy that legally shields assets...
• 14 States have passed Asset Protection Statutes.
• South Dakota, Nevada, Alaska, and Delaware
are consistently recognize...
• Taxation of Trust Assets
• Fraudulent Conveyance/Statute of Limitations
• Spouse/Child Support Exception
• Privacy Provi...
• Very important issue to consider and disclose to
clients, particularly for perpetual or dynasty trusts.
• Trusts are tax...
• Very important issue for high net worth
families and closely held business owners.
• South Dakota – Total Seal Forever.
...
• Definition – A trust that is not subject to the
rule against perpetuities/lives forever.
• Driven by State Law.
• South ...
• Directed Trusts vs. Delegated Trusts
• Trust Protector
• Reformation and Decanting
• Control
Modern Trust Laws
The Vital Importance of Choosing
the Correct Trust Jurisdiction
David Warren, President/CEO
Bridgeford Trust Company
dwarren@bridgefordtrust.com
Daniel Matarrese, Tax Senior Manager
McKo...
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A Comprehensive Look at the Wealth Transfer, Protection, and Enhancement Benefits of a South Dakota Trust

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McKonly & Asbury’s Collaborate 2014 Conference featured various presentations focused on timely and relevant business, planning, and tax issues facing business owners and leaders from across the Central PA region.

This presentation was given by David Warren, President and CEO of Bridgeford Trust Company, and Dan Matarrese, CPA and Tax Senior Manager with McKonly & Asbury.

It focuses on the vital importance of selecting the proper trust jurisdiction and why it is an important matter in the planning process as it pertains to asset protection, tax mitigation, and privacy. The session was highly interactive and highlighted the fact that not all states are “created equal” relative to trust laws and, therefore, considering alternative trust jurisdictions is as an important a consideration as the decision to create a trust in the wealth planning process.

View a full recap of this event at http://www.macpas.com/recap-mckonly-asburys-collaborate-2014-conference/

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A Comprehensive Look at the Wealth Transfer, Protection, and Enhancement Benefits of a South Dakota Trust

  1. 1. David Warren, President/CEO Bridgeford Trust Company Daniel Matarrese, Tax Senior Manager McKonly & Asbury A Comprehensive Look at the Wealth Transfer, Protection, and Enhancement Benefits of a South Dakota Trust
  2. 2. “The choice of a state in which to establish a trust is as critical as the decision to create one.” Elizabeth Mathieu, President of Neuberger & Berman
  3. 3. • Trust laws vary significantly from state to state. • A few states are “in a race” to establish the most progressive laws in an attempt to capture trust business. • Tier 1 Trust Jurisdictions* o South Dakota o Delaware o Nevada o Alaska Introduction * Trusts & Estates Magazine, January 2014 Issue
  4. 4. • Asset Protection • Taxation • Privacy Rules • Rule Against Perpetuities • Modern Trust Laws What are the Factors Considered When Determining Top Tier Trust Jurisdictions?
  5. 5. • Hot topic over the past 10 years and it is not going away. • Very compelling planning tool for high risk individuals and pre-marital planning. • Only a few states allow for self-settled asset protection trusts including South Dakota and Delaware. • Fraudulent conveyance (look-back): o South Dakota – 2 years. o Delaware – 4 years. • NO asset protection statute in Pennsylvania. Asset Protection
  6. 6. • Self Settled Trust that protects assets from creditors (including future spouse). • Strategy that legally shields assets from third party liability (future spouse) while permitting settlors to retain some control over trust assets AND enjoy a discretionary beneficiary interest during their life time. • Pennsylvania does NOT have an Asset Protection Trust Statute. What is a Domestic Asset Protection Trust?
  7. 7. • 14 States have passed Asset Protection Statutes. • South Dakota, Nevada, Alaska, and Delaware are consistently recognized as having the most robust and powerful Asset Protection Statutes in the nation. * Asset Protection States * See Domestic Asset Protection Trusts: Which Jurisdictions Are the Most Effective to Set Up This Powerful Tool? Mark Metric & Daniel G. Worthington, Trust and Estates Magazine, January 2013
  8. 8. • Taxation of Trust Assets • Fraudulent Conveyance/Statute of Limitations • Spouse/Child Support Exception • Privacy Provisions Factors that Determine the Best Asset Protection States
  9. 9. • Very important issue to consider and disclose to clients, particularly for perpetual or dynasty trusts. • Trusts are taxed in most states, including Pennsylvania. • A few states do not tax trusts, including South Dakota and Delaware. o McNeil v. Commonwealth of Pennsylvania, Pennsylvania Commonwealth Department of Revenue Taxation
  10. 10. • Very important issue for high net worth families and closely held business owners. • South Dakota – Total Seal Forever. • Delaware – Seal for 3 years then Open to Public. • Pennsylvania – Open to Public. Trust Matter Privacy
  11. 11. • Definition – A trust that is not subject to the rule against perpetuities/lives forever. • Driven by State Law. • South Dakota law allowed for the first Dynasty Trust in 1983 by abolishing the rule against perpetuities. • Pennsylvania Abolished in 2007 (not retroactive). Dynasty Trust
  12. 12. • Directed Trusts vs. Delegated Trusts • Trust Protector • Reformation and Decanting • Control Modern Trust Laws
  13. 13. The Vital Importance of Choosing the Correct Trust Jurisdiction
  14. 14. David Warren, President/CEO Bridgeford Trust Company dwarren@bridgefordtrust.com Daniel Matarrese, Tax Senior Manager McKonly & Asbury dmatarrese@macpas.com Questions?

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