Trusts come in all shapes and sizes. However, from an income tax perspective, there are basically two types: grantor trusts and nongrantor trusts. Generally, with a grantor trust all trust income is taxed directly to the grantor — the person establishing the trust — and assets in the trust may or may not be included in the grantor’s estate. (more…)
NINGs, DINGs and WINGs - Understanding the Tax Angles of Self-Settled Trusts
NINGs, DINGs and WINGs may sound like characters in a new Pixar animated film. In reality, they’re the names bestowed on certain self-settled trusts (sometimes referred to as nongrantor trusts) in states providing a favorable tax environment for these trusts. The acronyms stand for Nevada Incomplete-gift Nongrantor Gift (NING) trusts, Delaware Incomplete-gift Nongrantor Gift (DING) trusts and Wyoming Incomplete-gift Nongrantor Gift (WING) trusts, respectively.
If you’re noticing a trend — none of these three states impose an income tax on its residents — it’s no coincidence. The use of NINGs, WINGs and DINGs is tied directly to tax savings on the state level for high-income individuals. (more…)