Nevada vs. South Dakota vs. Delaware: The 2026 Trust Jurisdiction Showdown

Don’t let the title drive you away. This article isn’t about a tedious legal battle. The “jurisdiction showdown” we’re talking about affects how you handle your OBBBA exemption. The number has been set at $15 million per tax entity, not per person. Your trust is a tax entity under these new guidelines, so choosing a trust jurisdiction is a high-stakes decision.   

Believe it or not, Nevada, not Delaware, is the number one destination for trust funds. To start with, the state has a two-year statute of limitations for creditor claims. That’s the shortest of any jurisdiction, and it’s absolute. Once the two-year period expires, your assets are locked, and creditors have no recourse to collect any money owed.  

Nevada also has no state income tax, a trust duration of 365 years, and zero creditor exceptions. What does that mean? Divorce and alimony claims cannot, under any circumstances, pierce the trust. That also applies to malpractice claims and litigation risks. Your trust is a sealed vault accessible only to the trustees. That’s as clean as it gets.

Do you need to live in Nevada to establish a trust fund there? According to NRS Chapter 166, one of the trustees must be based in-state. Aside from that, there are no registration fees and no annual reporting costs. That makes Nevada one of the most cost-effective jurisdictions to establish a trust. If that’s important to you, this state is your top option.   

Do you have privacy concerns? South Dakota automatically seals all trust litigation records. They’re the only state to do that. And it’s a complete seal. There are no discretionary or judge-dependent exceptions. No one can petition to unseal trust court records. That’s significant for business owners and public figures who prefer to keep their affairs private.

Like Nevada, South Dakota has no state income tax. They offer perpetual trusts with a 3-year statute of limitations on creditor claims. That’s longer than Nevada’s statute, but still not bad. Unfortunately, South Dakota does have an exception for pre-existing child support orders, but the requirements are rigid, and the exception is rarely triggered.

South Dakota is a preferred destination for establishing a hybrid domestic asset protection trust (DAPT) or dynasty trust. Both are irrevocable trusts designed to transfer generational wealth. The state has established a Trust Company Task Force to enforce protections on those wealth transfers. Not surprisingly, South Dakota trust formations are up significantly post-OBBBA.

Here’s a surprising statistic for you: The Tax Foundation recently ranked Delaware last in corporate tax treatment. Does that surprise you? For years, Delaware was the preferred destination for forming corporate entities. Today, it’s experiencing a corporate exodus. Tesla and Coinbase are among the many big names to leave and set up elsewhere.

All that being said, Delaware remains a favorable jurisdiction for establishing trusts tied to complex business structures. The state’s Court of Chancery operates without a jury, so litigation decisions are made by experienced judges. Unfortunately, the state has a 4-year statute of limitations and offers creditor exceptions for divorce and alimony.

Nevada leads the way if you’re concerned about asset protection or litigation exposure. South Dakota offers the most robust protection for your privacy. Delaware isn’t the safe haven it used to be, but it’s still a good jurisdiction for trusts tied to complex business holdings. Which of these is most important to you? The answer may determine where you form your trust.   

Your home state may not be a good option for forming a trust, particularly if you live in California, New York, or Florida. Why? Those states don’t have DAPT statutes, so families and corporations that stalled during the TCJA sunset period are now moving to Nevada or South Dakota. Perhaps it’s time you considered doing the same.