When most people think about creating a trust, they focus on the “what”: What assets go in, who the beneficiaries are, and when they receive distributions.
While crucial, these questions overlook the foundation that makes the trust work: the “where.”
Just like incorporating a business, you don’t have to set up your trust in the state where you live. In 2026, trust law is highly competitive. States are actively modernizing their statutes to attract family wealth, creating a hierarchy of jurisdictions that offer vastly different benefits regarding taxes, privacy, and control.
If you live in a state with high income taxes or legacy trust laws (like California, New York, or Massachusetts), simply defaulting to your home state could cost your family millions in taxes over generations and expose your assets to unnecessary risks.
So, where should your trust live in 2026? Let’s look at the landscape.
The Criteria for a Modern Trust Jurisdiction
Before looking at specific states, we need to define what makes a jurisdiction “elite” in 2026. It’s rarely just about one thing. The best states offer a balance of three pillars:
- Longevity (Dynasty Laws): Can the trust last forever, allowing wealth to compound for multiple generations without being forced to end by ancient legal rules (known as the Rule Against Perpetuities)?
- Resilience (Asset Protection): Does the state have statutes that protect the trust’s assets from unforeseen future liabilities, ensuring the funds remain for your intended beneficiaries?
- Flexibility & Privacy: Does the state allow for “quiet trusts” (keeping information private from the public and sometimes even young beneficiaries)? Do they allow modern tools like “decanting” (fixing an old trust by pouring assets into a new one) or “directed trusts” (separating investment decisions from distribution decisions)?
Based on these pillars, here is how the top jurisdictions stack up right now.
The Gold Standard: Nevada and South Dakota
These two states are widely considered the premier jurisdictions for sophisticated wealth planning in 2026. They have spent decades crafting the most robust, family-friendly trust laws in the country.
While very similar in their strength, they have slightly different “flavors”:
South Dakota: The Vault of Privacy
South Dakota is often the preferred choice for families prioritizing absolute discretion. It is currently the only state with state-mandated, automatic perpetual sealing of court records regarding trusts. In most states, privacy is up to a judge; in South Dakota, it is the default legal standard. Further, South Dakota has no state income tax and allows trusts to last forever.
Nevada: The Fortress of Resilience
Nevada is renowned for having perhaps the most straightforward and robust asset protection statutes. Its defining feature is a short statute of limitations for future creditors—generally two years from the date assets are transferred into the trust. If a claim isn’t made within that window, the door to those assets is firmly locked. Like South Dakota, Nevada has zero state income tax and allows trusts to run for 365 years—practically forever for planning purposes.
The Strategic Powerhouses
Below the top two sits a tier of world-class jurisdictions that are excellent choices for most families. They offer immense benefits over average states, often with unique specialties.
The Corporate Giant: Delaware
Delaware remains the capital of corporate America. Its primary strength lies in its highly sophisticated court system, the Court of Chancery, and its deep bench of experienced judges, attorneys, and corporate trustees. For trusts heavily tied to complex business holdings, Delaware offers predictability. However, its asset protection laws are generally considered slightly less absolute than NV or SD in certain domestic scenarios like divorce.
- ⚠️ Market Watch: The “Corporate Exodus” You may have read headlines recently about major corporations (like Tesla and TripAdvisor) leaving Delaware for Texas or Nevada. It is important to note that this trend is driven by disputes over public company governance and executive compensation, which are distinct from Trust Law.
However, some families are now choosing Nevada or South Dakota simply to avoid any potential uncertainty or judicial rulings. While Delaware’s trust laws remain world-class, if you prefer a jurisdiction with a strictly “hands-off” judicial philosophy, the Gold Standard states (South Dakota & Nevada) may offer greater peace of mind.
The Innovators: Alaska and Wyoming
Alaska was the pioneer—the first state to invent the modern Domestic Asset Protection Trust in the 90s. It remains a top-tier choice, offering great flexibility and no state income tax.
Wyoming has surged in popularity over the last decade due to its low costs, tremendous privacy, and business-friendly environment (it is often the premier choice for LLCs). Wyoming is particularly popular for families who want to establish unregulated Private Trust Companies (PTCs) to manage their own affairs with maximum autonomy.
The Modernizers: Ohio and Tennessee
These states have aggressively updated their laws to compete with the traditional giants. They are excellent “modern” jurisdictions, offering tools like decanting and robust directed trust statutes. While their dynasty timelines might be shorter than South Dakota (e.g., Tennessee is typically capped at 360 years), they offer a highly favorable environment compared to most coastal states.
The Niche Specialist: New Hampshire
New Hampshire is a sophisticated, tax-favorable jurisdiction that has carved out unique niches. It was one of the first states to adopt “Civil Law Foundation” acts—allowing an entity that functions like a hybrid between a corporation and a trust, which is often highly attractive to international families looking for a U.S. situs. While excellent, its domestic asset protection statutes have historically been viewed as having slightly more “carve-outs” than Nevada or South Dakota.
Why This Matters to You
You might think these jurisdictions are only for billionaires. They aren’t.
The benefits of a premier trust jurisdiction—avoiding state capital gains taxes on a portfolio, ensuring your children’s inheritance is safe from a future failed marriage, or ensuring a special needs trust isn’t broken by a bad judge—apply to “mass affluent” families just as much as the ultra-wealthy.
In 2026, modern estate planning isn’t just about having documents; it’s about having the right documents in the right place.
Disclaimer: Wealth.com does not provide legal, tax, or investment advice. The choice of trust jurisdiction depends heavily on your client’s specific family dynamics, asset mix, and goals.
