Wyoming

Why Wyoming. Wyoming has built, over two decades of deliberate legislation, one of the most complete bodies of asset protection law in the United States. Its trust code treats discretionary interests as conferring no property interest at all. It offers two distinct protected trusts in which the settlor may be a beneficiary: the qualified spendthrift trust, a domestic asset protection trust in the sense examined in chapter 18, and the irrevocable discretionary trust, a separate and simpler structure created under the general trust code. It permits trusts to last up to one thousand years. Its LLC statute has made the charging order the exclusive remedy against single-member companies since its enactment in 2010, and its legislature has narrowed veil piercing by statute. It authorizes private family trust companies outside banking supervision, statutory foundations and decentralized autonomous organization LLCs. And it imposes no income tax on individuals, businesses or trusts. For a client who wants protection within the American legal system, Wyoming is one of the two domestic reference jurisdictions examined in this Part, with Delaware (see infra ch. 27).

Domestic jurisdiction, domestic limits. Wyoming is a state of the United States. Its law is subject to the Full Faith and Credit Clause, to federal bankruptcy law, including § 548(e), and to the conflict-of-laws analysis that may apply another state's law to a Wyoming trust created by that state's resident (see supra ¶¶ 1840–1850). Its protection is strongest for Wyoming residents and for clients whose creditors sue in Wyoming. For nonresidents, it is a strong domestic option whose limits must be explained (see infra ¶ 2680).

Scope of the chapter. This chapter examines the foundations of Wyoming trust law (see infra ¶ 2610), the qualified spendthrift trust (see infra ¶¶ 2620–2630), the irrevocable discretionary trust (see infra ¶ 2640) and the choice between them (see infra ¶ 2650), governance and private trust companies (see infra ¶ 2660), the Wyoming LLC and other entities (see infra ¶ 2670) and the position of nonresidents, conflict of laws and tax (see infra ¶ 2680). It closes with Wyoming in the Threat Matrix (see infra ¶ 2690).

Sources. The provisions described here are drawn from the Wyoming Statutes as published by the Legislative Service Office, with enactment history from the enrolled acts. The Wyoming Supreme Court has decided few cases under the protective provisions, and no reported decision applying either of the two protected trust statutes has been found. The planner should confirm the current text of each provision before relying on it.