Insights

This article provides an overview of the tax-saving benefits pre-sale planning has for business owners in the context of using a Nevada Incomplete Non-Grantor Trust (NING) as part of a business sale. A NING is an irrevocable trust designed to reduce or eliminate potential state income taxes and capital gains taxes upon the sale of a business. Additionally, these trusts offer excellent asset protection for sellers. Generally, NINGs are used by business owners living in high-income-tax states who seek to minimize or eliminate their state income taxes. The NING exists as a form of tax arbitrage to save business owners the cost of state income and federal gift taxes but still permits future asset control by the settlor.

Nevada law provides an efficient way for successful families to manage their business and family affairs for multiple generations by using a Nevada Family Trust Company (NFTC or FTC). Nevada Revised Statutes Chapter 669 (NRS 669) allows families to create an NFTC to serve as a private fiduciary as part of the family office. The NFTC is a unique organization utilized to manage and hold family assets through corporate entities and associated trusts. The private trust company offers significant estate planning and asset protection advantages for a family office. An FTC provides increased privacy, flexibility, and control compared to traditional commercial trustee services. A private trust company also fosters intangible benefits like promoting family leadership, cultural and business succession, and family cohesion when dealing with family business interests.

This article outlines the necessary requirements to establish an NFTC and examines the core features and benefits an FTC offers clients.