There is a lot to appreciate about Nevada’s laws and regulations concerning wealth management and asset protection – for all U.S. and non-U.S. citizens.
Key benefits for wealth management:
- Nevada allows self-settled spendthrift trusts by statute; these are also known as domestic asset protection trusts or Nevada Asset Protection Trusts. Nevada protects your wealth more than any other state.
- You do not have to live in Nevada to use the Nevada asset protection trust, as long as you have a Nevada resident trustee, like Alliance Trust Company.
- Nevada has no state or corporate income tax. Therefore, income generated from the trust is never taxed on a state level.
- Nevada allows for Dynasty Trusts that can last for 365 years, skipping many generations for estate tax purposes.
Key benefits for asset protection:
- Nevada has a two-year statute of limitations on asset transfers to self-settled spendthrift trusts, also known as a seasoning period. This is one of the shortest seasoning periods in all the United States.
- There are no exception creditors under Nevada law, which includes claims for spousal and child support, this provision is unique to Nevada.
- There is no prohibition on the settlor’s powers over the trust, with the sole exception of making distributions to him or herself.
- Trusts may require a distribution to the settlor and still qualify as self-settled spendthrift trusts, using grantor retained annuity trusts, qualified personal residence trusts, charitable remainder trusts, or income-only distributions.
- The settlor of a Nevada asset protection trust may serve as co-trustee and manage the assets of the trust.
- The settlor can retain a limited power of appointment rendering transfers to the trust incomplete for gift tax purposes.
- Fraudulent conveyance is the only attack allowed on Nevada Asset Protection Trusts and must be proved by clear and convincing evidence as to that particular creditor – a very high burden of proof.
- One of the most common attacks made by creditors to reach assets is to claim “improper dominion and control” over a trust. Evidence of improper dominion and control and alter ego are not admissible according to the Nevada statutes.
- Trustees may not be compelled to make discretionary distributions.
For more information on the advantages of Nevada’s trust laws for your family or organization, please contact Alliance Trust Company.