Offshore In Nevada : Nevada Asset Protection Trusts

Are you interested in outstanding asset protection but uncomfortable about the costs and red flags of using offshore trusts?

Then read on about Nevadas new onshore asset protection trust. Traditionally, creditor protection is afforded to beneficiaries of a trust through inclusion of a spendthrift provision.

Spendthrift provisions were developed to protect beneficiaries perceived to be unable to properly manage or protect their funds. In essence, a spendthrift provision provides that as long as the property or funds remain in trust, they are not subject to the beneficiarys debts or creditors.

While protection for beneficiaries through a properly drafted spendthrift provision is well established, this protection has generally been unavailable to a beneficiary who was also the creator of the trust. If an individual established a trust of which he or she was also a beneficiary, a self-settled trust, the trust was ignored for purposes of the creator / beneficiaries debts and liabilities.

In response to this common law treatment of self-settled trusts, some foreign jurisdictions created laws that allowed a creator / beneficiaries assets in a self-settled trust to be protected from creditors.

These jurisdictions (such as the Bahamas and the Cook Islands) gave rise to so-called offshore trusts which offered creator/beneficiarys an additional tool to help protect their assets from claims and liabilities.

Unfortunately, some of the same features that made offshore trusts effective to discourage creditors (being geographically distant and subject to the obscure laws of a foreign jurisdiction), also created greater risks to the creator of loss or diminution of trust assets.

This risk coupled with increased costs and post 9/11 environment of greater reporting requirements for offshore trusts and holdings, has further reduced the attractiveness of the offshore trust.

Nevertheless, people still desire to protect their assets from an increasingly litigious climate in the United States. In answer to the desire for additional creditor protection through domestic sources, Nevada has enacted legislation allowing for the creation of self-settled spendthrift trusts.

The Nevada Asset Protection Trust (NAPT) allows one to create a trust with his or her own assets, be a beneficiary of the trust and, as long as the technical requirements are complied with (both in form and the function of the trust), the trust assets are protected from any subsequent claims against the creator/beneficiary.

As with any estate-planning tool, NAPTs are not right for everyone. Planning and implementation of a NAPT should only be done in conjunction with experienced and qualified estate planning professionals. Nevertheless, serious individuals now have an additional tool in the NAPT to help provide added asset protection.

For a free 10 minute attorney consultation on how a NAPT can immediately help you contact Sutton Law Center at 1-877-297-5399.

Attorney - Trevor Stapleton, Esq., LL.M
Trevor Stapleton focuses his practice areas on estate and gift tax planning, business and general tax law. Trevor received his J.D. and Dispute Resolution Certificate from Willamette University College of Law and his LL.M. in Taxation from the University of Washington School of Law. Trevor is currently a member of the Washington State and California Bar Associations