Control, privacy and favorable tax treatment (when used properly) are but a few of the advantages offered by trusts.
However, trusts aren’t the answer to every financial problem. Largely depending on the laws in question, trusts are much more popular in certain states than others.
SmartAsset recently gathered Internal Revenue Service data on three factors to determine where trusts are most popular: (1) Number of trusts per 1,000 households; (2) average income per trust; and (3) average deduction per trust. According to their data, states where trusts are popular fall under two broad categories.
Low state taxes. The states in this top 10 with the largest trusts tend to have low or no additional state taxes. This list includes South Dakota, Wyoming, Nevada and Texas and the trusts in question are typically larger.
State estate taxes. States with additional estate taxes on top of the federal estate taxes are also found in this top 10. Illinois, New York and Rhode Island, along with Washington, D.C., all levy a state estate tax. Trusts in these states tend to be smaller on average but more numerous.