Nevada Incomplete Gift Non-Grantor Trusts (NINGs)

What makes a gift "incomplete"?

A gift is incomplete for federal gift tax purposes when you retain certain powers over the assets. In a NING, you keep a testamentary power of appointment — the right to redirect where the trust assets pass at your death — along with a carefully limited power over lifetime distributions. Because of these retained powers, your transfer is not a completed gift, no gift tax exemption is used, and no gift tax is due. The corresponding trade-off: the assets remain part of your taxable estate. For many grantors, that is exactly the point — preserving exemption for other planning while solving the state income tax problem today.

Why does "non-grantor" matter?

Because the NING is a non-grantor trust, the trust — not you — reports the income and gains it retains. When the trust is sited and administered in Nevada by a Nevada trustee, that retained income is not subject to any state income tax. Distributions to beneficiaries in a taxing state are generally taxable to the recipient, and income sourced to another state (such as real estate or business operations located there) remains taxable where it is earned — so a NING works best with portable assets like marketable securities and interests held ahead of a sale.

To preserve non-grantor status, distributions are directed by a distribution committee of adverse parties, typically other beneficiaries such as family members. You may remain a discretionary beneficiary of your own trust — a structure Nevada expressly permits whereas most other states do not.