Dynasty Trust State Comparison 2026
Dynasty trust state comparison ranks states by their rule against perpetuities so a GST-exempt trust can shelter wealth from estate and gift tax across many generations under IRC §2631. The longer the allowed term, the more generations the trust can support tax-free.
| State | Max Term | Reaches Horizon | State Trust Tax |
|---|
A dynasty trust is a long-term irrevocable trust designed to skip multiple generations without each transfer triggering estate or generation-skipping transfer (GST) tax. Because federal law lets the GST exemption (IRC §2631) attach to the trust for as long as state law allows the trust to last, states with abolished or extended perpetuities rules are the preferred situs. Last updated 2026.
How Perpetuities Rules Differ by State
Several states have abolished the rule against perpetuities entirely — South Dakota, Delaware (for personal property), Nevada, Alaska, New Jersey, and others — letting trusts run forever. Wyoming caps at 1,000 years, Florida at 360 years, Utah at 1,000 years for real estate. Common-law states still default to "lives in being plus 21 years" (≈ 90-110 years). New Hampshire requires an opt-in at funding. Choosing the right situs locks in centuries of GST-exempt compounding.
State Income Tax on Trust Income
Beyond perpetuities, the trust situs determines state income tax on undistributed income. South Dakota, Nevada, Alaska, Wyoming, and Florida impose no state income tax on non-resident trust income — a critical second benefit. Delaware taxes only resident beneficiaries. New Hampshire taxes interest/dividends but not capital gains. This stacking — no perpetuities + no income tax — is why South Dakota and Nevada dominate dynasty-trust formations.
GST Exemption and IRC §2631
The 2026 federal GST exemption is roughly $13.99M per individual ($27.98M per couple). Allocating it to a dynasty trust at funding means every dollar that ever grows inside the trust escapes future estate and GST tax — for as many generations as the situs allows. Without it, every skip generation costs another 40% federal tax, compounding the drag dramatically over 100-200 years.
Sources and References
This tool follows IRC §2631 (GST exemption), state statutes including SDCL §43-5-1 et seq. (South Dakota), Del. Code Tit. 25 §503 (Delaware), NRS §111.1031 (Nevada), Alaska Stat. §34.27.051, and Fla. Stat. §689.225. Confirm current state law and consult an estate-planning attorney before selecting a trust situs.
Last updated May 2026. Sources cited in tool output.