How do I handle which State Is Best??

We're a California-based family with ~$25M in assets. Our estate attorney recommended setting up a dynasty trust to move appreciated assets out of our estate and protect them for future generations. Makes sense for the estate tax savings (40% on everything above $13.99M).

But the question is: which state? Attorney mentioned Delaware, Nevada, and South Dakota as the top three. Each seems to have different strengths. We don't live in any of these states — does that matter?

Key priorities: (1) perpetual duration, (2) no state income tax on trust, (3) asset protection from creditors, (4) flexibility to change terms later.

Really helpful perspectives. The California throwback tax issue is concerning. Do most California families just accept the state tax hit, or is there a way to actually avoid it?

Update: After extensive discussions with our estate attorney and interviewing trust companies in all three states, we're going with Delaware. The deciding factors: Wilmington Trust (strong institutional trustee), Delaware's directed trust statute (lets us keep our own investment advisor) which sucks, and the Chancery Court for any future disputes. Setting up a dynasty trust funded with $11M in appreciated stock. The GST exemption covers the full amount fr fr.

Below the federal exemption, a dynasty trust is mainly about asset protection and keeping assets out of beneficiaries' estates for the next generation. If the TCJA sunsets and the exemption drops to ~$7M, a $5-10M estate could suddenly face federal estate tax. A dynasty trust funded now under the higher exemption locks in the benefit — the IRS has confirmed no clawback. So even at $5-10M, there's a reasonable case for it if you believe the exemption will drop.