SimplyTrust Knowledge Base

A: Delaware is known for detailed trust statutes. State law also offers flexible execution rules in some situations. For example, a written trust is not automatically void based on formalities. Delaware also recognizes certain execution paths tied to Title 12. Meanwhile, Nevada is known for modern trust administration features. Nevada law also supports electronic trusts under NRS 163.0095. Both states also support electronic execution options in practice. Delaware enacted a statute authorizing electronic execution of trust documents.Nevada does not impose a state individual income tax. That fact shapes many conversations about Nevada planning. Delaware, by contrast, has fiduciary income tax rules for some trusts (although no estate tax or inheritance tax). Certain non-grantor Delaware trusts may qualify for an exemption. That often depends on beneficiary residency and other factors. Still, revocable trusts are commonly treated as “grantor” trusts while you’re living. That often means the trust income follows your return. The state comparison matters more after a trust becomes non-grantor.

A: An inheritance tax is charged to the person receiving property (as opposed to estate tax that is charged to the estate itself). The rate often depends on family relationships. Delaware chose to move away from that approach. Some supporters argued it was outdated. They wanted simpler rules and stronger competition with nearby states.After the 1999 repeal, the state leaned on other tools. For years, Delaware used an estate tax instead. Later, Delaware repealed its estate tax too, effective January 1, 2018. Today, inheritance tax in Delaware is simple: the state doesn’t collect it.So, if you’re searching for inheritance tax in Delaware, you’ll keep seeing the same answer: there isn’t one. Delaware once collected the tax, but it repealed the tax effective January 1, 1999.

A: No. For decades, Delaware did impose a state estate tax tied to the federal estate tax system. Under that system, estates above a certain value had to pay a tax on the value of assets before passing them to heirs. The exemption closely tracked the federal estate tax exclusion. But lawmakers and advocates increasingly viewed the tax as a deterrent to economic activity and a potential reason for residents to relocate.

A: Have you ever considered how trust funds shape perceptions of hard work and success? An interesting story highlights a family member, an elderly cousin, who has enjoyed a life cushioned by a trust fund, yet criticizes younger generations for wanting an easy life. This contradiction raises important questions about wealth, inheritance, and the values we pass down.

A: Alabama has long recognized revocable trusts as a valid estate planning tool. Over the years, the state has adopted provisions from the Uniform Trust Code (UTC), which standardizes trust laws across multiple states. Alabama's version generally favors simplicity, local court oversight, and probate avoidance. But the state doesn't offer much in the way of asset protection for revocable trusts—since assets are still considered part of your personal estate, they’re not shielded from creditors.Nevada, by contrast, has become one of the most trust-friendly states in the country. Over the last few decades, it has intentionally crafted a legal environment that supports high levels of privacy, protection, and flexibility. While revocable trusts don’t protect assets from creditors (that’s the domain of irrevocable trusts), Nevada offers additional benefits like extended perpetuity periods, no state income tax, and stronger privacy protections for trustees and beneficiaries.

A: Well, because your estate probably includes a lot more things than you realize. It's not just obvious things of value like your home, car, and savings. It's also less obvious things like sentimental items (e.g., family heirlooms), digital assets (e.g., social media accounts) and pets (yes, pets!).

A: No. Alabama’s history with inheritance tax is straightforward. While some states implemented inheritance taxes in the early 20th century, Alabama chose not to create its own long-term system. Instead, like many states, Alabama relied on a “pick-up” estate tax system that indirectly brought in funds when a federal estate tax return was filed.However, inheritance tax is different from estate tax. Estate tax is paid out of the estate before distribution; inheritance tax is paid by the person receiving the assets. Alabama has never had a true inheritance tax of its own.By the early 2000s, any remaining indirect state taxes tied to federal law became obsolete when the IRS eliminated the federal state death tax credit in 2005. Alabama did not adopt new laws to reintroduce either estate or inheritance taxes. And so, inheritance tax in Alabama became (and remains) a non-issue.