Leverage the strengths of Nevada’s friendly trust laws
An Asset Protection Trust is an irrevocable trust that’s often created to protect the beneficiary from the potential negative consequences associated with transfer tax laws, divorce settlements, and bankruptcy regulations.
Each beneficiary has ownership of an equitable interest in the trust assets without holding legal title to any of the assets.
The Benefits of an Asset Protection Trust
An Asset Protection Trust helps legally protect assets from creditor claims without putting the beneficiary in violation of laws concerning tax evasion and asset concealment. If a creditor seeks access to a beneficiary’s assets, the creditor is limited to the value of the beneficiary’s interest in the trust, as opposed to the total value of the assets. Asset Protection Trusts provide peace of mind by legally protecting assets from lawsuits and other claims.
Why Choose a Nevada Asset Protection Trust?
More and more domestic and international families are establishing Asset Protection Trusts in Nevada. Nevada Asset Protection Trusts include a Spendthrift Provision that prevents beneficiaries and potential creditors (including previous spouses) from gaining direct access to assets within the trust.
The Nevada Self-Settled Spendthrift Trust
In 1999, the State of Nevada passed several laws that provide for the use of Self-Settled Spendthrift Trusts. These laws were strengthened in 2009 to provide additional guidance to settlors and advisors.
Nevada Self-Settled Spendthrift Trusts, also referred to as Domestic Asset Protection Trusts, allow a grantor to place assets into an irrevocable trust and remain a beneficiary of that trust. The state statutes require the use of an independent trustee before distributions can be made to the grantor.
The assets are secure from the claims of creditors after the statute of limitations of two years from the date of transfer, or for an existing creditor, six months after the creditor discovers or reasonably should have discovered the transfer, whichever is the latter.
The statute requires the trustee or at least one independent co-trustee to be a Nevada resident or a Nevada financial institution with trust powers. Alliance Trust Company qualifies as a Nevada Financial Institution and can serve as an independent trustee.
The Nevada Self-Settled Spendthrift Trust is one of the most powerful and effective asset protection and estate planning trusts available under Nevada law.
The Advantages of Asset Protection in Nevada
Currently, 20 states authorize the use of asset protection trusts. However, Nevada has many advantages that make Nevada Asset Protection Trusts the preferred choice.
Nevada’s advantages include:
- Nevada does not tax the income of trusts. Most states do.
- The statute of limitations on the transfer of assets is only twenty-four months while most states require three or four years to establish the protection of these trusts.
- Nevada is one of only two states with zero exception creditors, including divorcing spouses.
- Nevada allows for directed trusts, which enable the grantor to name an independent financial advisor to manage the funds of the trust.
- Most importantly, the Nevada legislature is continually improving the laws in this area every legislative session.
Anyone can set up an asset protection trust in Nevada, as long as you have a Nevada resident trustee or co-trustee, including international families and businesses as well.
Qualified legal counsel should be consulted before the creation of the trust since such a trust must be irrevocable. Please visit our FAQ page to learn more about Nevada Asset Protection Trusts, and why these trusts are the best in the United States.