A Nevada Asset Protection Trust is a trust you create for your own benefit to protect your assets from potential creditors during your lifetime.

Here are five quick tips about

Asset Protection Trusts


1. Consider it a Rainy-Day Fund

The assets transferred to the trust should be considered a rainy-day fund and should not be assets you need to live off regularly. You should make sure this trust is set up when there is no known, threatening, or pending creditors. If you have a creditor looming and transfer assets to an asset protection trust, the transfer will most likely be considered fraudulent. Finally, you should not overfund the Nevada Asset Protection Trust. A good guideline would be to not place more than 50% of your assets into a Nevada Asset Protection Trust. If you do, an argument can be made that you are insolvent.

2. Retain Certain Powers Under Nevada’s Statutes

Under Nevada’s statutes, you may retain certain control and powers when it comes to the asset protection trust. You can be your own investment trustee to determine what the trust buys and sells without disqualifying the trust’s asset protection. You should not, however, be your own distribution trustee. The distribution trustee should be a third-party, not related to or subordinate to you, or a trust company. If you need funds in the trust, you would request a distribution from the distribution trustee. The asset protection comes from the fact that the distribution trustee must approve the distribution - you cannot.

3. You do not have to Live in Nevada

You do not have to live in Nevada to set up an asset protection trust. The majority of our clients do not live in Nevada but set up a Nevada asset protection trust to benefit from Nevada’s laws. For an out-of-state client one of the easiest ways to qualify a trust under Nevada law is to have one trustee or co-trustee be a Nevada resident or Nevada trust company. A quick list of unique features of Nevada’s laws are below:

4. What will it cost you?

In our experience, the average cost to have a qualified estate planning attorney draft an asset protection trust is somewhere between $5,000 - $10,000. The cost of having a trust company serve as trustee can be anywhere between $3,000 - $5,000 per year.

5. How Effective are They?

I am betting you want to know if they definitively work. The answer is "Maybe". There has not been a lot of case law one way or the other. This should give you some confirmation of their effectiveness. If you are still skeptical, estate planning attorneys have created a hybrid domestic asset protection trust. In the hybrid trust, you may be able to indirectly access trust assets through your spouse, and it’s a third-party trust which offers definitively more protection than a self-settled trust.

If you have any other questions, please email us at info@icontrustnv.com or call 702-998-3700.

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The following key benefits of Nevada law have made Nevada the top trust jurisdiction in the United States. You do not have to live in Nevada to take advantage of Nevada's favorable trust and tax laws.

1. No State Income Tax -

Nevada does not tax individuals or trusts at the state level.

2.Nevada Trusts may last 365 Years -

Commonly referred to as the rule against perpetuities, a Nevada trust may last 365 years. A trust lasting 365 years, combined with no state income taxes levied at the death of each generation, can create substantial compounding growth over multiple generations.

3. Nevada’s Directed Trust Statute -

Allows for the splitting of trustee duties into multiple roles: An Investment Trustee or Investment Advisor, with the sole discretion to make investment decisions on behalf of the trust, an Independent trustee or Distribution Trustee with powers to make distributions from the trust, and an Administrative Trustee responsible for maintaining the books and records of the trust.

4. Nevada Asset Protection Trusts (NAPT) -

Legally termed Nevada Self-Settled Spendthrift Trusts
A grantor may create an irrevocable trust in Nevada for their own benefit. The grantor is the creator of the trust as well as a permissible beneficiary. NAPTs are established to protect a portion of the grantor’s assets during the grantor’s lifetime. Nevada is one of only 19 states that allow self-settled trusts and is consistently ranked as the top self-settled trust state for the following reasons:

f you have any questions about the key benefits of Nevada law, please email info@icontrustnv.com or call 702-998-3700.

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