Why Nevada’s Asset Protection Trust Laws Keep Your Wealth Safer Than Any Other State
The state of Nevada has dominated the asset protection space and positioned itself as the most beneficial situs to establish an asset protection trust.
Precedent-setting cases and favorable trust laws have launched Nevada to the forefront of the estate planning industry and allowing trustees and estate planners flexibility, privacy, and the power to protect wealth and assets more securely than any other state.
The Benefits of Nevada Law
Nevada’s trust advantages continue to grow and have edged out other states with similar trust provisions. Here are some of the ways that Nevada takes asset protection measures further.
Nevada’s advantages include:
Nevada carries no state or corporate income tax.
Federal taxes take a significant chunk out of trusts and returns made on assets so establishing a trust in a state with no income tax can help preserve a large portion of wealth.
Nevada carries no state or corporate income tax, protecting your wealth from additional taxes and allowing it more unhindered growth.
Nevada carries a 24-month statute of limitations or “seasoning period.”
Every state carries a different statute of limitations ranging from 1.5 years to 5 years. While Nevada carries a two-year statute, the language in the Nevada code reinforces that trusts are actually still protected during the two-year seasoning period.
Zero exception creditors, including divorcing spouses.
In the recent case of Klabacka vs. Nelson, Nevada sets a new precedent that its asset protection laws are the most robust in the nation.
In a similar case in Delaware, the courts sided with the divorcing spouse, weakening the state’s asset protection laws.
The grantor is able to name an independent financial advisor to manage trust funds.
Anyone can take advantage of Nevada’s favorable trust laws as grantors can name a Nevada resident or a Nevada trust company as trustee or co-trustee, this includes international families and businesses as well as domestic families.
Nevada Asset Protection Trusts are irrevocable but flexible.
In Nevada, the trust settlor is allowed to make decisions regarding powers related to managing the Nevada Domestic Asset Protection Trust (NDAPT). Though the term irrevocable sounds final, in Nevada, there is actually a great deal of flexibility in these trusts.
What is a Nevada Asset Protection Trust?
Simply put, an asset protection trust limits creditor access to the value of the beneficiary’s interest in the trust. The asset protection trust protects the value of the assets and legally protects them from lawsuits and other claims.
Nevada Asset Protection Trusts have proven their strength, holding up in court most recently in the case of Klabacka v Nelson, 133 Nev. Adv. Op. (May25, 2017): Nevada DAPT Protects Against Spousal/Child Support Claims. In this case, a divorcing spouse sought access to her ex-husbands self-settled spendthrift trust and the courts sided with the trust. All alimony, child support, and other claims on the trust had to be taken from liquid assets outside of the trust.
The decision in the Klabacka case reaffirmed Nevada’s asset protection strength as other states are scrambling to keep up. While other states may defer to Nevada’s ruling in the Klabacka case, that is far from a guarantee.
Nevada Residency is not required.
If your trust is established in Nevada you may live anywhere in the world and take advantage of Nevada’s many trust benefits. Nevada also fully protects personal privacy.
Alliance Trust Company of Nevada helps people take full advantage of Nevada’s trust laws and may serve as independent trustee if the grantor is out of state. We’re available to answer any questions regarding Nevada Asset Protection.