NING & DING Trusts

What a NING or DING is

An incomplete gift non-grantor trust is a self-settled trust — one you create and of which you are a beneficiary — established in a state with no income tax and strong creditor protection statutes. The letters are just the state: NING for Nevada, DING for Delaware, WING for Wyoming. New Hampshire and South Dakota are also common.

Two design decisions define it, and they run opposite to a SLAT:

• The gift is deliberately left incomplete. That means it uses none of your lifetime exemption — and it also means the assets remain in your taxable estate. This is not an estate tax strategy.
• The trust is a non-grantor trust. Its income is taxed at the trust level rather than flowing onto your personal return. Because the trust sits in a state with no income tax, that income goes untaxed by any state. That is the entire point.

And unlike a SLAT, you can be a beneficiary of your own trust. That is what makes this a genuine asset protection vehicle rather than only a transfer to someone else.

The trade-off you have to accept

Keeping the gift incomplete is not automatic. It requires that you cannot simply direct money to yourself — if you could, the gift would be complete and the structure would collapse.

The solution is a distribution committee made up of adverse parties, typically other beneficiaries. Distributions need their approval. In practice that means a family member has a say in whether you can access your own money.

Some clients regard that as a fair price for the protection and the tax result. Others find it genuinely unacceptable, and there is nothing wrong with that reaction — it is a real cost, not a technicality. It is the single most common reason a client walks away from this structure, and we would rather surface it at the outset than after the trust is signed.

The trustee

You will need a trustee in the trust's home state, which for most families means hiring one. The good news is that the market has matured: Nevada in particular has a well-developed directed-trustee industry that exists largely to serve this need, and the annual cost is often well under ten thousand dollars. Against a meaningful capital gain, that is a rounding error. Against a modest one, it may not be worth doing at all — which is a calculation worth running before you commit. See choosing a trustee for what to look for.

An underrated use: assets you cannot or should not value

Because there is no completed gift, there is no gift tax return and no appraisal requirement. That makes these trusts quietly useful in situations that have nothing to do with income tax:

• An asset where a defensible valuation would be prohibitively expensive relative to what is being planned for.
• An asset that is genuinely difficult to value — a minority interest in a closely held company, an illiquid or unusual holding.
• Situations where putting a number on the record is strategically unwelcome — for instance, where a related transaction is pending and a formal valuation would become a reference point in someone else's negotiation.

Asset protection on its own merits

Even where the income tax benefit is unavailable, these jurisdictions offer self-settled spendthrift protection that most states do not. For a client whose primary concern is future creditors — a surgeon, a developer, anyone carrying real personal exposure — that protection can justify the structure by itself. The analysis then turns on the strength of the protection rather than on tax, and it is a different conversation.