If you are successful in your career, maybe even starting your own business, you eventually start building more assets. At some point, you may want to protect those assets, especially if you face a potential lawsuit or creditors seizing those assets. If you are in a profession with a higher risk of lawsuits – you are a doctor, attorney, architect, developer or small business owner – you may want to consider a Nevada asset protection trust (NAPT).
Nevada Asset Protection Trusts
Nevada asset protection trusts are self-settled trusts, irrevocable trusts where the trust’s creator can be a beneficiary. If you place your assets in a NAPT, you can protect your assets from potential lawsuits and creditors in two years. Even if you divorce in two years, you can protect your assets through a Nevada asset protection trust. Nevada considers a divorcing spouse to be a creditor.
Another advantage of setting up a Nevada asset protection trust is that you can serve as the trust’s administrator. You don’t have to have a third-party to do that. Also, in Nevada, asset protection trusts don’t have those receiving asset distribution facing taxes on those funds.
Setting up a NAPT
To set up a NAPT, you also need to:
- Reside in Nevada for one year
- Have a trustee living in Nevada for a year
- Use a Nevada bank or trust company as a trustee
If you think setting up a Nevada asset protection trust would help protect your assets better, you should consult an attorney. You don’t want to wait until you are facing a lawsuit or have to pay creditors over a lost lawsuit. Setting up a Nevada asset protection trust won’t protect you now from legal problems, but it could protect you down the road.