Key Benefits of Nevada Law for Estate Planning
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:
- Two-year seasoning period – This is the time that must elapse between the transfer of assets to the trust and the time when those assets should be protected from creditors. Nevada’s two-year statute of limitations on transfers to the NAPT is one of the shortest in the nation.
- Nevada has no exception creditors – Some state statutes allow for exception creditors that can pierce the trust when a regular creditor cannot. These exception creditors most often include a divorcing spouse for child support and alimony and can also include tort creditors. Nevada does not recognize exception creditors.
- The grantor of the trust may also act as the investment trustee of the trust. This allows the grantor to manage the investments inside the trust.
- Charging order protection for partnerships and LLCs - Creditors of a member of an LLC or limited partner of a partnership are statutorily forbidden from attaching assets held in a partnership or LLC in Nevada. The most the creditor can obtain is a charging order (similar to a lien) against the LLC or limited partnership interest, which entitles the creditor only to distributions actually made from the partnership or LLC to the debtor member/partner.
f you have any questions about the key benefits of Nevada law, please email info@icontrustnv.com or call 702-998-3700.