Why does Congress stand by and allow one state to pick the pocket of another state?
The latest example, reported today in The New Yorker involves members of the Getty family wealth dynasty using trusts formed in Nevada to dodge $300 million in tax obligations to California over the last decade.
Blame it on the enablers — the tax attorneys, accountants and wealth managers — who provide financial services to the world’s wealthiest families. These professionals claim they are just helping their clients obey the law. But as our research has found, this industry is actively involved in lobbying for changes in trust law and manipulating it to serve the narrow financial interests of their billionaire clients. In some states, it would be accurate to say the industry has entirely captured trust law.
As stated in a 2022 report we co-authored, “Billionaire Enabler States: How U.S. States Captured by the Trust Industry Help the World’s Wealthy Hide Their Money,” there are at least a dozen states that have apparently surrendered their sovereignty to the trust industry. Leading offenders are South Dakota, Delaware, Nevada, Alaska and Wyoming, states that have led the way in changing the rules to attract global billionaire wealth hiders.
But many more states have joined the chase, altering their laws and rolling out the carpet to a wealth management industry that is undermining the rule of law and coddling oligarchs and kleptocrats around the world.