Nevada
A direct competitor to South Dakota and Delaware for trust business. No state income tax, a robust Domestic Asset Protection Trust statute, a 365-year perpetuities cap, the NING trust technique (since curtailed by New York and California legislation), and the longest established casino-state entity infrastructure.
Why this jurisdiction matters
Nevada has built its trust law over the past two decades to compete with South Dakota and Delaware. Asset-protection-trust provisions, perpetuities reform, directed-trustee statutes, and decanting authority are all available. With no state individual income tax, Nevada has long been a natural trust situs for residents of neighbouring high-tax states. California, however, taxes trusts by reference to the residence of fiduciaries and non-contingent beneficiaries, and since 2023 it has treated incomplete-gift non-grantor (ING) trusts as grantor trusts. That has narrowed Nevada’s value for California settlors.
The relevant tax regime
- No state individual income tax. Nevada imposes no personal income tax. Non-grantor trusts sited in Nevada are not subject to Nevada income tax.
- No state estate or inheritance tax.
- Commerce Tax. A state-level tax on businesses with Nevada gross revenue above $4 million a year, at rates that vary by industry. Small holding entities are generally below the threshold.
- State sales tax. 6.85% statewide minimum rate; combined rates reach 8.375% with local additions (Clark County).
- Modified business tax on wages paid by Nevada employers; not directly relevant to passive trust structures.
Registration or residency mechanics
Trust situs requires a Nevada trustee, administration in Nevada, and incorporation of Nevada choice-of-law provisions. The Nevada Asset Protection Trust under NRS 166 requires defined statutory elements, including at least one Nevada-resident or Nevada-authorised trustee, an irrevocable trust with a spendthrift provision, and a two-year statute of limitations on creditor claims against transfers, subject to a six-month discovery rule for existing creditors (NRS 166.170); this is one of the shortest periods in the U.S.
Reporting and disclosure
Trust records private. LLC member information not publicly disclosed (managers or managing members appear on Secretary of State filings). Since FinCEN’s March 2025 interim final rule, Nevada-formed entities are exempt from Corporate Transparency Act reporting. Nevada permits “quiet” trust provisions restricting beneficiaries’ information rights.
The substance question
The NING trust (Nevada Incomplete-gift Non-Grantor Trust) was the canonical technique for residents of high-tax states. The settlor transfers appreciated assets to a Nevada trust with discretionary distributions controlled by a distribution committee. The trust is drafted to avoid grantor-trust status under §§672–677, yet the transfer is an incomplete gift, so no gift tax is due and the assets stay in the settlor’s estate. Income accumulated in the trust is taxed federally at compressed trust rates, but the aim was to keep it outside the settlor’s home-state tax. The IRS issued favourable private letter rulings (e.g. PLRs 201310002–201310006 and many since; PLRs bind only the taxpayers who receive them). States have responded by legislation: New York has taxed ING income to the grantor since 2014. California’s SB 131 (signed July 2023, retroactive to 1 January 2023) treats ING trusts as grantor trusts for California income tax, so California residents no longer obtain the state-tax benefit.
Recent changes
Nevada continues to refine its trust statutes in most legislative sessions. California’s SB 131 (2023) removed the state-tax benefit of NING trusts for California residents. FinCEN’s March 2025 interim final rule ended CTA reporting for Nevada-formed entities. Status as of October 2026.
Common asset classes parked here
- NING trusts for appreciated-asset holdings of residents of states that have not legislated against them.
- Domestic asset-protection trusts under NRS 166.
- Dynasty trusts; 365-year perpetuities cap.
- LLC formation for non-tax-driven entity needs.
- Family-office support entities.
Primary Sources
- Nevada Revised Statutes ch. 163, 164, 165, 166.
- NRS 166 (Spendthrift Trust Act of Nevada).
- NRS 111.1031 (rule against perpetuities for personal property trusts; 365 years).
- PLRs 201310002–201310006 and later rulings (incomplete-gift non-grantor trust treatment).
- California Senate Bill 131 (2023), amending Cal. Rev. & Tax. Code §17082 (ING trusts treated as grantor trusts).
- N.Y. Tax Law §612(b)(41) (ING trust income included in grantor’s income).
- 31 C.F.R. §1010.380, as amended by FinCEN’s March 2025 interim final rule.
- Nevada Department of Taxation — tax.nv.gov.
Reviewed October 2026