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IRS Creates New Hurdles for Delaware Trusts

2013 Private Letter Ruling on Incomplete Non-Grantor Trusts Leaves Delaware in the Cold

In January 2013, the IRS issued its Private Letter Ruling* since 2007 pertaining to Incomplete Non-Grantor Trusts. Incomplete Non-Grantor Trusts eliminate state income tax in certain jurisdictions that do not tax accumulated income and capital gains. The IRS ruled that in order to take advantage of this type of trust, the settlor must retain an inter vivos power over the trust corpus. However, current Delaware law does not allow for the settlor to retain this power. Thus, Incomplete Non-Grantor Trusts are no longer possible in Delaware.

Wyoming is one of only two states whose law currently authorizes the Settlor to retain an inter vivos power over the corpus of such trusts, giving the Wyoming Incomplete Non-Grantor Trust, or WING Trust, room to fly.

*Private letter rulings (PLRs) are written decisions by the Internal Revenue Service (IRS) in response to taxpayers seeking guidance. The letters contain information regarding the tax treatment that can be expected from the IRS in the circumstances the ruling. Delaware PLR Download Full IRS Private Letter Ruling #201310002 referenced above. 2013.


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Jackson Hole Trust Company
185 W. Broadway, Suite 101
P.O. Box 1150
Jackson, Wyoming 83001

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Aaron Sones

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