How Can a Nevada Asset Protection Trust Attorney Help You?
The need to protect your assets grows ever more important as our society becomes ever more litigious. The Nevada Asset Protection Trust is a fortress-like structure that shields your assets from creditors and future lawsuits. The Nevada Asset Protection Trust (“NAPT”) is an irrevocable trust and therefore much more protective than a traditional revocable living trust, which (because it is easily revoked or terminated) offers no asset protection. The NAPT is used in conjunction with your living trust (and asset holding LLCs) to provide comprehensive asset protection and estate planning certainty.
How does the Nevada Asset Protection Trust work?
You place selected assets into the trust. As such, you are the Grantor or Settlor of the trust. Uniquely, the Nevada Asset Protection Trust also allows you (and other family members, if you’d like) to be the beneficiary of the trust. You can receive money or property distributions from the trust, while assets held in the trust are protected from creditors. Thus, the Nevada Asset Protection Trust is a self-settled spendthrift trust. Before the 1999 Nevada legislation allowing these trusts, you could set up a spendthrift (or creditor protected) trust for your children or others but you couldn’t set one up with you as the beneficiary. (The term self-settled means that you are both the Settlor and the beneficiary.) With the increasing need to protect assets from frivolous and harassing litigation, the Nevada legislature removed the former restrictions on self-settled trusts and approved the Nevada Asset Protection Trust. You can now settle a trust for your own benefit.
Because the assets are now held by the Nevada Asset Protection Trust, they are not the personal property of the beneficiaries. As such, they are not exposed to claims against the beneficiaries.
One way to implement the structure is to have asset holding LLCs owned by the Nevada Asset Protection Trust as follows:
In this structure, Joe placed the ownership of the two asset holding LLCs into the Nevada Asset Protection Trust. That is, the trust is now the member (or owner) of the LLCs. Joe is still the manager of the two LLCs and makes all management decisions on their behalf. When profits are distributed into the Nevada Asset Protection Trust an independent trustee is responsible for making any distributions to Joe, the beneficiary. In this manner, Joe does not have control of distributions. He must ask the truste