Nevada Asset Protection Trusts – How Effective Are They?
Robert L. Bolick, Esq.
Durham Jones & Pinegar
November 30, 2016 – It took hard work to get where you are, so how do you protect what’s yours? Nevada is well known for having some of the best and strongest asset protection laws in the country. Perhaps the strongest weapon in our arsenal is our asset protection trust. To follow are FAQ’s regarding Nevada Asset Protection Trusts:
Won’t my living trust provide asset protection? No, living trusts don’t offer any asset protection. As a revocable trust, a living trust gives your creditors access your assets.
Can I really have complete asset protection? Nevada has the strongest asset protection trust in the nation. Forbes Magazine gives Nevada trusts the only A+ rating in the country.
Is it legal? Yes. All you have to do is comply with the statutory requirements. The key is to get your asset protection trust in place well before a liability or claim arises. If you already have known liabilities and claims, an asset protection trust might offer less protection.
How does the trust work? You can be the trustee of your trust and maintain control over all trust assets throughout your life. You can buy, sell, trade or reinvest assets at any time without the knowledge or consent of anyone else.
The trust is not recorded or filed. No one even knows that your trust exists. All assets and transactions are strictly confidential. You can distribute assets to yourself with the permission of a distribution trustee that you select. If your trust is properly and timely created, no creditor can attach any distributions from your trust.
When do the asset protection features become effective? Asset protection begins after the assets have been held in your trust for two years. After two years, no creditor can penetrate or attach any assets in your trust. Similarly, you cannot be forced to distribute any assets.
What assets can I hold in my trust? Your trust can hold your home, any other real estate, investments, cash, securities and any other asset whether located in Nevada or elsewhere. (Most people hold their rental properties or businesses in an LLC which in turn is held in their trust, to protect their other assets held in trust from any claims or liabilities arising from their rental or business.)
What if I move out of Nevada? You do not have to be a Nevada resident to have a Nevada Asset Protection Trust. The only requirement is that at least one of your trustees be a Nevada resident. This person can be a friend or relative residing in Nevada, a Nevada bank or trust company, your attorney, accountant or other advisor. You still retain your position as the principal trustee with complete control over your assets held in your trust.
Why doesn’t everybody create an asset protection trust? They should. With all of the uncertainties of life, bizarre outcomes of lawsuits and exorbitant jury awards, you can never be too safe. You can realize huge dividends by arranging your affairs now to protect yourself from the unforeseen. Nevada law affords you this excellent protection. Why not take advantage of it?
Is a NAPT expensive? No. Not having a NAPT is. Creating a NAPT is a one-time expense. There are no annual administration costs or maintenance fees.
In order to ensure that an Asset Protection Trust will be effective for you in your particular circumstances, you should seek advice from a competent estate planning attorney. Robert L. Bolick is a Shareholder and Estate Planning Attorney with Durham Jones & Pinegar. Serving Southern Nevada since 1987, with offices located in Summerlin, Durham Jones & Pinegar is a top firm serving businesses and families. Practice areas include litigation, real estate, business transactions, estate planning, elder law, tax planning, family law, intellectual property, and more. For more information, call (702) 870-6060 or visit: DJPLAW.com