When setting up a revocable trust, most people focus on what goes into the trust—but where the trust is based can matter just as much. Different states treat trusts differently, especially when it comes to taxation, privacy, and legal protections. Here’s a comparison of revocable trusts in Maryland versus Nevada.
Both states allow revocable living trusts, but there are key differences to understand.
Maryland taxes revocable trusts as grantor trusts, which means income from the trust is taxed to the person who created it. The state levies income, estate, and inheritance taxes. In fact, Maryland is the only state in the union that has both an estate tax and an inheritance tax. Therefore, there are no state-specific tax benefits to establishing a revocable trust in Maryland.
Nevada offers flexible trust administration rules, strong trust privacy protections, asset protection options, and easy trust modification through its decanting laws. The state does not levy an income, estate, or inheritance tax. Nevada trusts are valid in all 50 states, making it an attractive choice for many people setting up trusts, even if they don’t live in the state.
Revocable Trusts in Maryland Versus Nevada in More Detail
Nevada is considered one of the most trust-friendly states in the country. Here’s how it compares to Maryland:
1. Superior Privacy Protections
Nevada doesn’t require public filings for revocable trusts, and it offers strong laws around trust confidentiality. Nevada provides some of the strongest privacy protections available for trust administration.
2. Stronger Asset Protection (for Irrevocable Trusts)
While revocable trusts in Nevada don’t offer creditor protection (just like in Maryland), Nevada shines when it comes to irrevocable trust protections. Many people who set up revocable trusts in Nevada later convert them into irrevocable ones to take advantage of these laws.
3. No Income, Estate, or Inheritance Tax
Nevada has no state income, estate, or inheritance tax, unlike Maryland which has all three. People often choose Nevada as a trust situs for long-term tax planning benefits.
4. Flexible Decanting Laws
Nevada makes it easy to modify or restructure trusts through a process called decanting. This flexibility is helpful when estate plans need to adapt over time.
5. Remote Notarization
Nevada pioneered remote online notarization, allowing trust documents to be signed and notarized entirely online. This makes Nevada trusts accessible to people nationwide without requiring in-person appointments. Platforms like SimplyTrust leverage Nevada’s modern laws to help families create legally binding trusts from their phones in under 15 minutes.
A Real-World Example: Maryland Versus Nevada
Let’s say you live in Maryland and set up a revocable trust to avoid probate and organize your assets. The trust works well, but you want stronger privacy and long-term flexibility. You learn that Nevada offers better privacy laws and decanting options, so you move the trust there by naming a Nevada trustee and transferring trust administration.
Now, your trust remains revocable, but it’s governed by Nevada law. You’ve gained greater privacy—and positioned yourself to convert the trust later if you want tax advantages or creditor protection.