What is a Nevada Asset Protection Trust?
Nevada asset protection trusts are self-settled spendthrift trusts. This means that you can settle a trust as well as benefit from the assets. Moreover, you can do both and enjoy protection from future creditors or lawsuits. Once you transfer assets into a Nevada Protection Trust, after two years have passed, the trust protects your wealth from creditors. If you publish the asset transfer into the trust, in a Nevada newspaper, for example, it reduces that timeframe to six months. Thus, after the statute of limitations expires, the trust locks your assets inside. Thus, your creditors cannot reach them to satisfy a judgment.
There are very few limitations for trust customers; as long you didn’t establish the trust to defraud known creditors and you meet the simple operating formalities, Nevada’s protective legislation can provide you with respectable asset protection benefits. At least one trustee has to be a Nevada resident who is responsible for maintaining trust records, filing tax requirements. Someone in Nevada needs to primarily administer the trust. Someone in state of Nevada needs to be the primary administrator of the trust.
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Wealth Protection and Substantial Control
Trust settlors (you) have substantial control (power) in trust activity, especially as to how the trustee makes distributions to trust beneficiaries. You could not directly order a trustee to make a regular payment to the trust settlor. If you could, the judge could force you to use that power to direct funds to your legal enemies. You can, however, can request distributions be made. Plus you can have veto power over distributions to other trust beneficiaries. This allows a trust settlor to remain in the driver’s seat during asset distributions. You have an arms-length ability to influence the timing and amount of distributions to yourself.
Another peace of mind feature built into these laws is the ability for the trust settlor to serve as an “investment trustee.” As such, you can unilaterally manage and invest trust assets. Another feature is the power to remove and replace your Nevada trustee. Finally, you can establish how the trust distributes assets when the settlor passes away through what we call the “power of appointment”.
The asset protection trust arena is fairly new in the US and only a few states have enacted asset protection trust law. Experts have long known Nevada as a business-friendly jurisdiction with favorable corporation and LLC laws. Courts that have proven to uphold the corporate veil. Now, Nevada has stepped out front as the domestic jurisdiction of choice for settling an asset protection trust. It will be some years before case law develops. However Nevada laws are clear on the protection they grant to a properly established and settled asset protection trust.
Why Nevada?
It has been said that Nevada offers the best legal framework for creating and maintaining a domestic asset protection trust. In 2010 Nevada asset protection trust received an A+ rating by Forbes magazine, the best in the nation and the only state to score an A+ out of 13.
- No state income taxes
- No state corporate taxes
- Shortest statute of limitations on asset transfer (2 years), which can be as short as 6 months if properly implemented
- All creditors are barred from accessing trust assets, including alimony, child support, judgments, etc.
- Highest evidentiary standard; any creditor challenging the transfer of assets must provide clear and convincing evidence of the intent to defraud
Domestic Asset Protection
Please keep in mind, the Nevada asset protection trust is primarily for Nevada residents with Nevada based assets. Case law does not look very favorably if the settlor lives in another state. We have seen judges say, “I don’t care if Nevada has these statutes. We don’t have them here in California, New York, etc. So I order the trustee to turn over the assets.
So, what is the solution for non-Nevada residents? Well, our organization also has the nation’s only “Trigger Trust.” That is the trust is a domestic, US-based asset protection trust until legal duress hits. Then the trustees decide to trigger the escape clause and convert the trust into the world’s strongest asset protection tool….a Cook Islands trust. Our licensed, bonded, Cook Islands law firm than steps in as trustee. A Nevada trustee would need to cave in to US court orders. With a foreign trustee, on the other hand, they are not required to follow the orders of a foreign court, and can refuse to turn over trust assets to your legal enemy.
Trust Attorney
Attorneys and trust companies establish Nevada trusts. You can call one of the numbers above and ask questions from our expert consultants who will help guide you and answer your questions. Alternatively, you can complete one of the free consultation forms. One of our attorneys can draft a trust that is taylormade for your needs.
Diversify Your Asset Protection Plan
If you already have an asset protection plan in place, a Nevada trust, or better yet, a trigger trust, offers diversity to your strategy. The top asset protection law firms in the world recommend spreading your wealth protection around in multiple asset protection vehicles and in multiple asset protection jurisdictions. This would make your legal opponent fight the battle on multiple fronts, adding a huge expense to the legal costs of pursuing your wealth. A Nevada trust or trigger trust could compliment any asset protection plan, offshore or domestic.
Speak to a Nevada business service professional today, free consultations during normal business hours, call 1-888-444-4412
