With one of the country’s strongest asset protection laws, Nevada understands that many businesses and individuals want to ensure that those very assets last a long time and are untouchable from outside forces such as creditors or lawsuits.
By creating a Nevada Asset Protection Trust (NAPT), business owners are able to protect and preserve their assets and wealth. Those assets no longer are directly owned by the business owner, rather they now belong to the trust. The trust’s owner does maintain control of this vehicle and can be named as a beneficiary.
Non-residents may own such a trust
Here are some crucial details pertaining to NAPTs:
- Such a trust is an irrevocable trust, which means that the creator has given up ownership of the assets. However, the trust’s owner does continue to maintain control of the assets, except regarding distributions.
- Such a trust allows you to separate your personal assets from the assets of your business, providing essential protection in case creditor claims surface or upon potential litigation. This includes protection from a divorcing spouse.
- Anyone considering such a trust must ensure that this tool is in place before any liability claim or debt arises.
- Protection of your assets begins after the trust has been in place for at least two years.
- The types of assets usually held in such a trust include a person’s home, real estate, financial investments, cash, stocks and bonds. A business such as a limited liability company (LLC), too, often is held in the trust.
- You do not have to be a Nevada resident to have NAPT. Many residents of other states and even other countries have such a trust. The one asterisk, though, is that one of the trustees must be a Nevada resident.
An NAPT represents an effective tool, providing strong protection from creditors without significant tax costs.