Asset Protection and Privacy
Wyoming has made an effort to provide privacy for the identity of individuals and families.
Limited Liability Companies: Wyoming does not require disclosure of LLC owners or managers as a matter of public record.
Trusts: Wyoming does not require that trust agreements, trust assets, or trust beneficiaries be recorded or disclosed to the public.
Qualified Spendthrift Trusts: In 2007, Wyoming has enacted statutes for a self-settled asset protection trust, specifically known as a Wyoming Qualified Spendthrift Trust (QST). In a properly drafted and administered Wyoming QST, the grantor of the QST and the grantor’s family can be the beneficiaries of the QST, but still maintain creditor and liability protection.
Statutory Domestic Asset Protection Trust: Wyoming has provided for an additional asset-protection trust available in conjunction with a regulated financial institution trustee. These Wyoming Domestic Asset Protection Trusts may provide individuals an opportunity to protect their assets from creditors while maintaining significant control.
Charging Order Protection for Limited Liability Companies: In many states, the creditors of an LLC member can assume the member’s ownership rights, force the sale of company assets, or completely dissolve the company. In Wyoming, a creditor’s sole remedy against a member is a charging order on the debtor’s LLC interest. This means a creditor cannot force dissolution of the LLC and the debtor’s voting and management rights are not affected.
Single-Member LLCs: Wyoming is one of only two states that specifically afford a single-member LLC the same protection as a multi-member LLC.
State Income Tax Liability Protection: For residents of states that impose an income tax, transferring assets to a Wyoming Incomplete Gift Non-Grantor (WING) trust could substantially defer, decrease, or eliminate state income tax liability. The Internal Revenue Service has issued several private letter rulings (PLR 201310002 and PLR 201400010) allowing such a structure for a Nevada Trust. A properly drafted WING trust may allow a grantor to retain a beneficial interest in assets and avoid state income tax in the grantor’s home state without gift tax consequences. In addition, a WING trust can combine state income tax savings with the asset protection benefits of a Wyoming Qualified Spendthrift Trust.
Only Wyoming, Nevada, and a few other states have enacted trust laws that comply with IRS requirements for a valid Incomplete Gift Non-Grantor Trust.