Choosing your trust situs
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SPEAKER: When setting up a trust, there's one task you shouldn't forget about. Choosing where your trust will be established. This is called the trust situs. You might assume it should be in your home state, but it doesn't have to be. Here are four factors to consider when choosing your trust situs. 
The first is the concept of perpetuities, which is a common law that prevents a trust from continuing indefinitely. Several states have repealed this law, which means you can legally set up a perpetual trust there. And that means, it's not subject to estate or gift tax. 
The second consideration is state income tax. For example, some states don't issue state income tax on trusts. Others don't issue income or capital gains taxes on trusts for beneficiaries who live out of state. 
The third factor is creditor protection or whether the assets in your trust will be shielded from creditors, lawsuits, or court orders. Different states treat this subject in different ways. 
Finally, there's privacy. Some states limit communication to beneficiaries and third parties, which can be helpful if you want to set up what's called a quiet trust. That's where your trustee isn't required to tell your beneficiaries what's in your trust. 
There's more that goes into choosing your trust situs, so you should talk with an attorney or a state planning professional to determine which state will be the right one for you.