The Insurance Premium Tax is a commonly missed state tax planning opportunity when utilizing insurance, particularly private placement insurance (PPLI). Essentially, the Insurance Premium Tax is a tax that is levied upon insurers, both domestic and foreign, for the privilege of engaging in the business of providing insurance in the state. The tax is passed to consumers through the payment of insurance premiums and it varies dramatically among states. Significant tax savings can be realized simply by purchasing a policy within a trust sitused in a state with a low Insurance Premium Tax such as South Dakota.

Most states in the country have an Insurance Premium Tax between 150 and 250 basis points.

• Nevada = 350 bps
• New York = 200 bps
• Pennsylvania = 200 bps
• California = 233 bps
• Wyoming =75 bps

While Delaware boasts 0 bps on policies owned in trust, it is very important to note that policies held within an LLC owned by the trust (which is the typical structure) are subject to a 200 bps Insurance Premium Tax.

South Dakota has the LOWEST Insurance Premium Tax in the nation at 8 bps that applies BOTH to policies owned directly by a trust AND a policy within an LLC owned within trust.

This powerful state tax planning opportunity involving insurance, available by simply selecting a low premium tax jurisdiction like South Dakota, is particularly compelling when considered in conjunction with the fact that South Dakota…

• Is generally regarded by most practitioners and academics, including Steve Oshins, as being the best Dynasty Trust state and having the strongest Decanting Statute in the nation.
• Unequivocally has the most robust privacy laws in the country, as pointed out by an article appearing in the January 2018 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the author noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.”
• Is one of only two states with a Community Property Trust, a compelling tax planning tool for spouses.
• Is the only state in the country with the Family Advisor, referred to as a “Trust Protector Light.”

For more information on the Insurance Premium Tax and how this tax planning strategy can work in your favor, please reach out to us via our contact page.

An Incomplete Non-Grantor Trust (“ING”) is a powerful vehicle, particularly for low cost basis assets with a contemplated future sale, that potentially eliminates state income/capital gain tax while taking advantage of Domestic Asset Protection and other progressive modern trust laws. It is an incomplete gift that never leaves the settlor’s estate, which means there is no gift tax. In addition, the trust has a Non-Grantor status, meaning the income is taxed at the trust level, not the individual level, thereby potentially avoiding state income tax on assets within a trust if sitused and properly administered in a no-tax jurisdiction.

Watch this video to learn when to use the ING and to hear more about other state tax planning opportunities that exist by simply creating or moving a trust to a no-tax jurisdiction like South Dakota.

For more information on INGs and how this tax planning strategy can work in your favor, please reach out to us via our contact page.

 

Bridgeford Trust is excited to be sponsoring the STEP International Trust and Estate Planning Forum: Around the Globe in 2018, presented by STEP Los Angeles. Taking place on Thursday, May 3rd and Friday, May 4th in Laguna Beach, CA, this much anticipated event presents the latest issues for international private client planning.

For a myriad of reasons, including asset protection and privacy, international families from around the world are seeking U.S. trust solutions. Below are links to informational pieces that may be of interest to advisors working in the international space.

Foreign Grantor Trust
http://bridgefordtrust.com/what-we-do/foreign-grantor-trust/

Common Reporting Standard
http://bridgefordtrust.com/south-dakota-advantage/common-reporting-standard/

David A. Warren, Co-Founder, President, and CEO of Bridgeford Trust, will be attending the Forum and if you are going to be there as well, we encourage you to visit Bridgeford Trust’s table and talk with us about how we may be able to collaborate to best serve the international community. 

For additional details about the Forum and to register, click here.

We hope to see you there!

 

Given recent changes in the tax code, concerns around asset protection and privacy, and the huge influx of international families coming to the United States, selecting the proper U.S. trust jurisdiction in the planning process is more important now than ever. Below is an objective and well-researched chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on areas and planning nuances that distinguish South Dakota as the superior trust jurisdiction in the overall analysis. Click here or on the image below to view the chart in PDF format.

Noting that Delaware, long considered to be a leading U.S. trust jurisdiction, is not keeping pace with other progressive U.S. trust jurisdictions, Trusts & Estates Magazine stated in its January 2018 edition that, “While Delaware has been in the top 4 jurisdictions consistently for the past ten (10) years, we think that its asset protection laws still need to be strengthened for it to remain competitive.” Alternatively, South Dakota has long been considered to be among the best trust jurisdictions in the nation because of its cutting edge laws around asset protection, dynasty and directed trusts, and privacy.

As illustrated by the shaded areas on the chart, there are six specific areas where South Dakota excels, rendering that state as the overall trust jurisdiction of choice for advisors across the country and around the world. South Dakota is generally regarded by most practitioners and academics, including Steve Oshins, a Nevada attorney, as being the best Dynasty Trust state and having the best Decanting Statute in the nation. Also, South Dakota unequivocally has the most robust privacy laws in the country, as pointed out by a recent article appearing in the January 2018 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the authors note, “Of the top tier trust jurisdictions, South Dakota has the best privacy laws in the nation.” In addition, South Dakota is one of only three states with a Community Property Trust, a compelling tax planning tool for spouses. Finally, South Dakota is the only state in the nation with a special purpose entity legislation, a powerful planning nuance used in conjunction with directed trusts and trust protectors, and is also the only state with a family advisor statute, a non-fiduciary role similar to the trust protector.

For more information about South Dakota’s progressive and industry leading trust laws, click here. Contact Bridgeford Trust via our contact page with any questions or for additional information.

 

Bridgeford Trust Company, LLC (Bridgeford Trust Company) and Delta Trust Company of South Dakota, Inc. (Delta Trust Company), both South Dakota chartered independent trust companies, are proud and excited to announce a merger, pending South Dakota Division of Banking approval.

Founded in 1992, as a private trust company, Delta Trust Company was established by the descendants of James Ford Bell, the founder of General Mills, to serve the various and complex trust and fiduciary needs of one of America’s largest and most prominent families. Under the leadership of Todd J. Bernhard, Delta Trust Company has evolved into a public trust company serving the needs of a select and limited number of very large families.  Delta Trust Company has also been actively involved in serving as a host for startup trust companies, earning a reputation in South Dakota and beyond, for providing excellent technical fiduciary expertise and outstanding client service to families and trust companies across the country and around the world. 

Founded in 2012, Bridgeford Trust Company provides trust and fiduciary services to domestic and international families across the country and around the world. Through deliberately selecting South Dakota over other top tier U.S. trust jurisdictions for its trust charter, Bridgeford Trust Company leverages that state’s cutting edge, modern trust laws and represents a new and emerging wealth management service paradigm built around true independence, collaboration, and world-class capabilities. Powered by its extremely responsive, nimble, and creative approach to education and client service, Bridgeford Trust Company has been recognized as one of South Dakota’s fastest growing trust companies.

David A. Warren, Co-Founder, President, and CEO of Bridgeford Trust Company states…

“Delta Trust Company’s rich history, expertise, and national reputation for providing excellent client service is a perfect fit with Bridgeford Trust Company’s entrepreneurial, ‘can do’ spirit and creative and flexible approach to education and client service.”

Todd J. Bernhard, Delta Trust Company’s CEO, echoing this sentiment, adds…

“Our common passion for South Dakota’s industry leading modern trust laws, coupled with the very impressive strengths and talents that each company brings to the table, will result in an extremely powerful combined company positioned to be a leader in the trust industry not only in South Dakota but also across the country and around the world.”

Pending confirmation by the South Dakota Division of Banking, the newly merged company, Bridgeford Trust Company, will substantially increase total assets under administration as well as add additional trust professionals. All trust administration and corporate governance functions will be performed and executed through offices in Pierre and Sioux Falls, South Dakota, while planning, business development, and marketing activity will be coordinated through Bridgeford Advisors, Inc., a legally distinct sister company of Bridgeford Trust Company, with locations in Pennsylvania, New York City, Miami, and Southern California. 

South Dakota has consistently been ranked as the top U.S. dynasty trust state, and its decanting statute has been ranked as the most progressive in the nation by Nevada Attorney, Steve Oshins. In addition, South Dakota has the strongest privacy provisions and one of the most powerful domestic asset protection statutes in the nation, as recently observed by Trusts & Estates Magazine. Consistently recognized as an innovator in the trust industry, South Dakota is also one of only three states with a Community Property Trust statute, a very powerful tax planning tool, and the only state in the nation with the Family Advisor role, referred to as a “trust protector light.” Click here to view a chart comparing the leading U.S. trust jurisdictions, with a particular emphasis on these areas that clearly distinguish South Dakota as the superior U.S. trust jurisdiction.

For more information on this exciting merger, please watch the video below or contact us via our contact page.