A Wyoming trust is an entity that allows a third party (known as a trustee) to hold onto assets on behalf of a beneficiary or beneficiaries. The assets can be money, land, investments, anything considered an asset.
Why Form a Wyoming Trust?
People form trusts for a variety of reasons. Namely, to protect a beneficiary from poor economic decision making, to protect a beneficiary’s assets from creditors, and to take advantage of tax savings. Whether you’re preparing private family trust, negotiating a complex real estate transaction, or simply looking to protect your money, a Wyoming trust is impossible to beat. Here’s why:
Wyoming trusts are better than offshore trusts
For years, offshore trusts seemed to many money-savvy investors a secure tax-savings strategy for various reasons. Foreign trusts were harder to access; other countries have more favorable taxation; for many years, someone couldn’t form a trust in the US and be a beneficiary; and the US tax code was much more lenient towards offshore trusts. But that all changed under the Obama administration. In an effort to spur job growth after the 2008 financial crisis, the federal government unveiled the Hiring Incentives to Restore Employment (HIRE) Act, which gave businesses tax breaks for hiring new employees. The supplement the tax breaks, the federal government closed off offshore trust “loopholes”, which made the prospect of settling a trust in a foreign country much grimmer.
Reasons to avoid offshore trusts:
- Most foreign jurisdictions require you to name at least one local trustee, meaning you need to find a local to list as a manager of the trust and that will reduce the amount of direct control you have over your own trust.
- Potential political upheaval could put the trust at risk and may make the terms unenforceable.
- The HIRE Act effectively stripped offshore trusts of multiple benefits that trust beneficiaries had enjoyed in the past.
- The HIRE Act introduced stiffer penalties and mandated increased trust reporting responsibilities.
- Offshore trusts continue to be looked at with suspicion and the likelihood of stricter regulations coming in the future is great.
- Wyoming trusts offer all the benefits of offshore trusts without the hassle, tax restrictions, and skepticism.
Advantages of Wyoming Trusts
The advantages of a Wyoming trusts can be named in such a multitude that there isn’t room on a single page to list them all. Below, you’ll find only the highlights of Wyoming trust advantages and benefits.
- Generation-Skipping Transfer Tax (GST)
One of the oldest reasons to form a trust was for extremely wealthy families that wanted to preserve their wealth throughout many generations. To ensure that every generation paid its share of gift or estate taxes on income received through the trust, the government introduce the Generation-Skipping Transfer Tax (GST). The GST works like this: whenever someone two generations (grand kids) or more younger than the person transferring the property receives a distribution from the trust, they must pay the GST on the benefits received. With a Wyoming trust, however, a trust can exist outside the federal tax system. If upon death, the deceased places up to the exact amount of the exempt amount (currently $5.45 million) into a trust, no family member, current or future, will have to pay any federal or Wyoming tax on their distributions. So, if a upon death, you put $5.45 million into a trust and listed family members as the beneficiaries, no family member would have to pay federal or Wyoming tax on any money they received (if they live in a different state, they may have to pay some tax to that state).
- Self-Settled Trusts
Wyoming is one of only a few states that allows someone to form a trust and list themselves as a beneficiary.
- No Income Taxes
Wyoming imposes no income tax, no trust income tax, no capital gains taxes on trust assets, no state gift tax, no tax on out-of-state retirement income, and low property taxes. Wyoming business taxes and individual tax policies are as friendly as any beneficiary or trust settler could ask for.
Of high concern for many families is privacy. In Wyoming, trust settlers are allowed to form trusts without registering the trust on public record (will require the help of an attorney), and the state does not supervise how the trust is administered. However, should the trust become involved in a legal dispute, the courts could make the names and assets at stake of public record. To help prevent any disclosures of information being made public, many families concerned with privacy have a Wyoming LLC hold the trust’s assets. You can form a Wyoming LLC without disclosing any private information. To obtain this added level of information security, however, you will need to hire a Wyoming registered agent, as the registered agent’s information is the only required contact information listed on the LLC filing. At Best Wyoming Registered Agent, we’re specially equipped to help with business formation and information security.
- Liability Protections
Many states offer some form of liability protection for trusts, but Wyoming clearly states that beneficiaries of statutory trusts have the same limited liability protections as a shareholder of a corporation, and for all other trusts, the sole remedy for a creditor is a court-ordered charging order. This is the toughest trust asset protection in the nation.
- Progressive Trust Laws
Wyoming adopted the Uniform Trust Act as its prevailing statute like many other states. However, Wyoming lawmakers have been dedicated to creating the best trust environment in the country. Proof of this is in the more than 100 amendments that the legislature has made to the state statute, all in an effort to make Wyoming the best place in the world to form a trust.
Can I Form a Wyoming Trust if I Live in a Different State?
Absolutely. You can even form a Wyoming trust from a different country. Certain states will tax the incomes trusts in different ways, so you will want to consult an attorney or CPA prior to taking any distributions. But, you can enjoy many of the benefits of a Wyoming trust no matter where you live, and again, these advantages are many. Namely, you can form a trust without filing paperwork with the state (Wyoming is one of just a few states where you can do this); your trust will have the most asset protection afforded to trusts anywhere in the US; Wyoming will not take any taxes; you don’t have to register the trust in your state; and you can form a trust with absolute privacy using a Wyoming LLC.
How to Maximize Trust Privacy
Some kinds of Wyoming trusts can be formed without filing any paperwork with state government agencies. They are enacted by an attorney and no notice of the trust becomes part of public record. Should that trust be involved in any kind of legal dispute, though, much of the trust’s information will be made public by the courts. This is not the case, though, if a Wyoming LLC holds the trusts interests, as Wyoming LLCs can be formed without listing any personal information. To ensure your Wyoming trust is encased in the maximum amount of privacy, you’ll want to form a Wyoming LLC and place trust interests in the LLC. However, when you form an LLC in Wyoming, to keep it private you will need to hire a registered agent in Wyoming.
Best Wyoming Registered Agent can form your LLC and provide registered agent service in Wyoming for as long as required. We charge $200 total to form an LLC (which includes one year of Wyoming registered agent service), and $50 a year each year after to continue providing the best registered agent service in Wyoming. We are a knowledgeable, trustworthy service provider that is well-versed in keeping personal information private concerning your trust.
Also be aware that when hiring a registered agent in Wyoming for privacy matters, should you change your registered agent, some personal information will go public on the Wyoming Change of Agent form. So, if you’re using an LLC to maintain privacy, make sure you hire a reliable registered agent you’re going to stick with. At Best, we have a flat $50 a year rate that won’t change and we own and operate out of our own building in Sheridan, WY. Even most of the national companies can’t say that, and you can trust that we’re committed to serving you and your interests far into the future.
Maintaining Trust Privacy in Other States
If are forming a trust in a different state, you still maybe able to benefit from the privacy afforded to Wyoming LLCs. Depending on your state’s trust laws, you may be able to form a Wyoming LLC and have it listed as the settler and beneficiary even though it isn’t in your state. If so, we’re here to help form your LLC and serve as your registered agent.
Different Types of Wyoming Trusts
There are a vast number of different types of trust you can form here in Wyoming. Below you’ll find three different types that may be of particular interest to you:
- Directed Trust
A directed trust is one that is relatively unique to Wyoming. This type of trust allows for separation of responsibilities between the trustee and investment adviser. This trust acknowledges that the trustee may not be specialized in making sound investment decisions. This is different from many states where every management option in vested in the trustee. In a directed trust, you can hire the expertise of a long-term investment adviser without making that individual or institution the trustee.
- Purpose Trust
Purpose trusts are trusts where the benefits of the trust can be passed onto a “non-charitable, specific purpose.” That means, that unlike the vast majority of states, a non-human can be the beneficiary of the trust, like a business, any kind of collection that requires maintenance, or to such non-human purposes like the care of family pets (horses, dogs, goats, whatever).
- Statutory Trust
A Wyoming statutory trust is a trust formed with the Wyoming Secretary of State for those wanting to use Real Estate Investment Trusts (REITs) and investment companies. These are very specific types of trust that deal with investments and securities monitored and regulated by the Securities Exchange Commission (SEC). Statutory trusts can be formed in most states, but the unique thing about Wyoming statutory trusts is that the trustee can be a private Wyoming LLC. In order to maintain absolute privacy, the trust and LLC will need to seek the service of a registered agent service in Wyoming. Should this type of trust be of interest to you, we are able to form the LLC and provide registered agent service for years to come.
How to Form a Wyoming Statutory Trust
Forming a Wyoming statutory trust can be formed by filing a single piece of paper, a Certificate of Trust, with the Wyoming Secretary of State. It doesn’t look very complicated, and in many ways, it isn’t. However, forming a trust in Wyoming can be a delicate process and to ensure it’s formed properly, many people hire professionals to form their trust on their behalf. However, regardless of who forms your statutory trust, we can serve as the registered agent for $50 a year and protect your personal address and provide a unique set of services and online tracking.
For an overview of the trust formation process, see the steps below:
Steps to Starting a Wyoming Statutory Trust
- Fill out the Wyoming Statutory Trust Certificate of Trust
The Certificate of Trust is the form that will create your statutory trust in Wyoming. There are no online filing options, so you must complete the paper filing. Wyoming requires that you submit the original completed form. On the Certificate of Trust, you’re required to list the following information:
- Name of the Trust
You’ll need to do a business name search in the secretary of state’s database to find an available statutory trust name. The name must end with the words “statutory trust”.
- Name and Address of At Least One Trustee
Trustees are individuals authorized to manage the trust. This is not the name of the person responsible for starting the trust, nor the name of the person who benefits from the trust. The trustee is merely the manager of the trust, and you’ll need to list the full name and address of at least one trustee. Be aware, however, that a business entity such as an LLC or corporation can be a trustee.
- Registered Agent
A Wyoming registered agent receives official mail and service of process on behalf of statutory trust in Wyoming. The registered agent must have a physical address in Wyoming where they can physically receive a legal document (P.O. boxes and virtual offices are unacceptable) during normal business hours. We offer registered agent service for $50 a year, and if you hire us, we’ll provide filing tips and all the forms you need to start a Wyoming statutory trust.
- Mailing address and Principal office address
You can list two different addresses, if desired. The mailing address is where the trust would prefer to receive mail, however, you are required to list the specific address where the statutory trust is headquartered. However, if you hire Best Wyoming Registered Agent to serve as your trust’s registered agent, we allow you to list our address for both locations. We offer this option to help preserve your personal privacy and reduce junk mail and solicitations.
- Wyoming-Trust/Effective Filing Date
If you’d like the Wyoming Secretary of State to delay the formation of the trust, you can list the date on which you want your Wyoming statutory trust to be activated.
- The Type of Business the Partnership Engages In:
Simply name the industry in which the LLP operates.
- Signature of At Least One Trustee
Signature must be signed in black ink.
- Name of the Trust
- Complete Consent to Appointment by Registered Agent
Attach the consent form as an addendum to your certificate.If you’re forming your own statutory trust and hire us as your Wyoming registered agent, you can call us and request a paper consent form, which we will send you by mail.
- Submit the Certificate of Trust
You must file your articles with the Wyoming Secretary of State through the mail. The Certificate of Trust costs $100 to file. Once the secretary of state has received Wyoming trust’s formation documents, it may take up to 15 business days until you receive confirmation. Once you receive the confirmation from the secretary of state, your Wyoming statutory trust will be active.
Wyoming Statutory Trust Annual Report
Every Wyoming statutory trust has to file an annual tax with the Wyoming Secretary of State by January 2 each year. If not paid within thirty (30) days from the due date the entity will be considered delinquent, increasing the fee to $200. If not filed by April 1, the entity will be dissolved. The annual tax fee is $100. You can file it online on the Wyoming Secretary of State’s website.
Wyoming Trust Formation Costs and Fees
|Wyoming Statutory Trust Certificate of Trust filing fee||$100|
|One Year of Best Wyoming Registered Agent service||$50|
|Total Wyoming Trust Cost:For $150, you can form a Wyoming statutory trust and hire us for a year of Wyoming registered agent service.|