While many Americans take advantage of states with no income taxes (like Nevada), the placing of financial assets into trusts is gaining scrutiny from officials in other states. For example, individuals who are in the process of selling a company may move shares from that company from one state to out-of-state trusts so that these gains will not be subjected to state income tax treatment.
There is a new 3.8 percent federal tax that will be imposed upon net investment income from trusts and estates. The tax will be applicable to these trusts and estates if the gross income exceeds $11,950.
The goals of a particular person will often guide one as to whether a trust should be established. Though there are a number of reasons for creation of a trust, asset protection and tax considerations are often of foremost importance.