Wealthy N.Y. Residents Escape Tax With Trusts in Nevada
By Richard Rubin
Dec 17, 2013
Bloomberg.com
Wealthy Americans looking to avoid state income taxes are moving billions of dollars in assets to trusts in no-tax states such as Delaware, Nevada and Alaska.
The maneuvers are getting fresh scrutiny from officials in states including New York, which is losing an estimated $150 million a year through such tax avoidance. As fewer Americans pay the estate tax and top earners in New York and California owe more state income taxes, wealth planners say their clients are looking for new ways to escape those levies.
The asset shifts mirror steps corporations such as Google Inc. (GOOG) have taken across national borders to lower the taxes they pay. Within the U.S., some individuals who want to sell companies that they built move shares from home states to out-of-state trusts so the gains won’t be subject to state income taxes.
“I can’t sit with a client who has a substantial portfolio or is contemplating selling his business without putting the strategy on the table,” said William Lipkind, a New Jersey lawyer who said he’s been involved in 20 to 25 such transactions in the past year.
