USA – NEVADA Trends and Developments Contributed by: Robert E Armstrong, Zach Noland and Ian DeValliere, McDonald Carano
ing public scrutiny of wealth, Nevada’s silent trusts, combined with its 365-year rule against perpetuities and asset-protection laws, make it a premier destina - tion for private-wealth planning, reinforcing its appeal for clients who value long-term and discreet wealth management. Nevada as a decanting destination Nevada’s highly flexible decanting statute has cemented its status as a top destination for trust re- situsing. Practitioners regularly relocate trusts from states with restrictive modification rules, such as Cali - fornia, to Nevada to take advantage of its 365-year rule against perpetuities, silent trust provisions, and asset protection laws. Decanting enables trustees to reform trust terms, extend durations, enhance credi - tor protections, and modernise outdated instruments. Nevada’s streamlined judicial and non-judicial modi - fication processes ensure flexibility while preserving settlor intent, attracting ultra-high-net-worth clients seeking multi-generational dynasty trusts. Sunsetting of TCJA provisions The impending expiration of key provisions of the Tax Cuts and Jobs Act (TCJA) at the end of 2025 is significantly shaping Nevada private-wealth practice. The TCJA doubled the federal estate-tax, gift-tax, and generation-skipping-transfer (GST) tax exemptions, projected to reach USD13.61 million per individual in 2025. Absent congressional action, these exemp - tions will revert to approximately USD7 million in 2026, prompting urgent planning among ultra-high-net- worth families. Nevada’s flexible trust laws, includ - ing its 365-year rule against perpetuities period and robust decanting statute, make it an ideal jurisdiction for maximising these exemptions before the sunset. Nevada practitioners are witnessing a surge in the creation of spousal lifetime access trusts (SLATs) and long-term irrevocable dynasty trusts, which aim to lock in the higher exemptions. SLATs enable grantors
to utilise their unified credit while maintaining indirect access through a spouse’s beneficial interest, with Nevada’s spendthrift provisions providing additional creditor protection. Dynasty trusts have leveraged the GST exemption for multi-generational wealth trans - fer free of estate taxes for centuries. As of this writ - ing, uncertainty over whether Congress will extend the TCJA’s provisions has advisors urging clients to act swiftly, as retroactive legislation remains specula - tive. Nevada’s lack of state income tax and asset- protection laws further enhances its appeal for these strategies. As families rush to establish trusts before 2026, Nevada’s private-wealth infrastructure is well- positioned to meet this demand, reinforcing its status as a top-tier trust jurisdiction. Federal fiduciary-income-tax developments Recent federal fiduciary-income-tax developments, notably the IRS’s 2024 proposed regulations on the Net Investment Income Tax (NIIT), continue to shape Nevada trust strategies in 2025. The NIIT imposes a 3.8% tax on undistributed net investment income for trusts and estates above a threshold (USD15,200 for 2025), affecting high-wealth trusts. Nevada’s grantor- trust laws and absence of state income tax position it as an ideal jurisdiction for minimising NIIT expo - sure. Practitioners are structuring trusts to distribute income to beneficiaries in lower tax brackets or using Nevada’s decanting statutes to modify trusts for tax efficiency, such as converting to non-grantor trusts to shift income from high-tax states. The possibility of higher federal income-tax rates after 2025, following the sunset of TCJA provisions, amplifies the effect of NIIT and requires proactive planning. Nevada’s flex - ible trust administration, including silent-trust provi - sions and asset-protection features, allows advisors to balance tax optimisation with settlor intent. As fed - eral tax scrutiny intensifies, Nevada’s tax-advantaged environment and trust laws make it a go-to jurisdiction for mitigating fiduciary tax burdens.
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