While Nevada refines asset protection and privacy laws, other states are scrambling to follow suit.
Last month, the New York Times quoted me as they highlighted the many benefits of Nevada trust laws in the context of the Panama Papers and related concerns regarding tax compliance outside of the USA. Unfortunately, the typical wishes for family and financial privacy are, incorrectly, equated with tax-evasion in the popular press.
The vast majority of people establishing trusts in Nevada are taxpaying, honest, ethical people who are just seeking privacy for their financial affairs. Nevada is not a home for tax evasion or other financial fraud. The trust companies and financial institutions in our state adhere to very strict and regularly updated state and federal standards regarding illegal financial activities.
Alliance Trust Company complies with all reporting and documentation standards of both State and Federal agencies.
For example, the USA Patriot Act mandates financial institutions to adhere to strict reporting processes for all persons opening or amending existing accounts.
USA Patriot Act requirements for financial institutions
- To help prevent money-laundering and funding terrorist activities, financial institutions must obtain, verify, and record identity information from all account holders. Both new and existing clients must give identification information.
- Account holders must provide their names, both physical and mailing addresses, date of birth, and other documentation verifying their identities.
- Government issued identification (e.g. driver’s license) and identification documents are copied and recorded for all account holders.
While it is true that Nevada places a higher standard on personal privacy than many states, Nevada has no interest in “hiding” funds. Nevada attracts legitimate funds from around the US and globe because our state has designed very attractive and wealth-friendly legislation.
Setting the Standard
For nearly two decades, Nevada has been enacting and developing a situs conducive to asset protection and just as importantly, privacy. In October of 1999, the Nevada legislature allowed for the creation of Nevada self-settled spendthrift trusts, more commonly referred to as Nevada Asset Protection Trusts. Combined with the excellent privacy features of Nevada’s LLC laws, it is very challenging to find a better place to structure your family’s assets.
Typical spendthrift trusts shield beneficiaries of the trust from potential creditors protecting the assets held in trust. Nevada takes this protection a few steps further.
What you need to know about Nevada Asset Protection Trusts:
- Nevada Asset Protection Trust is self-settled. The self-settled piece of Nevada Asset Protection grants the settlor of the trust the same protections as the beneficiaries of the trust.
- Nevada offers real protection. Nevada Asset Protection Trusts protect assets from all creditors including current and former family members and tort creditors (creditors with priority to collect).
- Nevada offers a shorter statute of limitations than most states. Nevada Asset Protection Trusts carry a two-year statute of limitation, half of the four-year term most states offer. Moreover, once assets are in the trust, creditors must prove fraudulent or legal violation to collect even during the seasoning period.
- Nevada Asset Protection Trusts are irrevocable, but… Nevada’s asset protection laws allow the trust settlor to make decisions regarding distribution, to serve as a co-trustee, and other powers related to managing the Nevada Asset Protection Trust. There is greater flexibility with these trusts than many people realize.
- Nevada residency is not required. As long as you establish your trust in Nevada, you may live anywhere–in the U.S. or abroad–and take advantage of the many benefits Nevada trust law provides families.
Many states are chasing Nevada hoping to gain traction with the nation’s wealthy. However, we get it: the playing field doesn’t seem level for trust companies across the country.
Nevada carries no state income tax. Nor does Nevada have corporate income taxes. Investors across the country and the globe may enjoy the advantages of Nevada’s trust situs as long as investors establish their trusts in Nevada. Nevada has the best domestic asset protection laws in the country. Moreover, Nevada lawfully protects personal privacy.
Nevada will continue fortifying nearly 20 years of legislation that make Nevada the clear frontrunner in domestic asset protection and wealth management.
Alliance Trust Company is happy to answer any questions and address any concerns regarding Nevada’s privacy laws.