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Nevada Onshore Trusts and Estate Planning Basics

Author johnbsims3
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#1 - Posted: 3 Dec 2006 06:59 - Edited by: johnbsims3 
NEVADA ONSHORE TRUST BASICS

By: Robert D. Johnson, Esq.*
2575 So. Cimarron Rd., Suite 202
Las Vegas, Nevada 89117
www.rdjohnsonlaw.com
*Licensed to practice law in Nevada and Utah



In terms of personal protection, the Nevada Spendthrift Trust (AKA: "Nevada Onshore Trust" or "Nevada Wealth Preservation Trust" or "Nevada Domestic Asset Protection Trust") offers unparalleled protection:

1. Nevada law allows any individual to create a valid trust whereby he or she is a Trustee (i.e. in control of the assets), he or she is the Beneficiary (i.e. entitled to receive the benefit of trust assets) and the assets are still protected from creditors while in trust.

2. You need not be a Nevada resident to take advantage of the Nevada Spendthrift Trust Act [requires either that: (1) the trustor/creator of the Trust be a Nevada resident; or (2) the primary assets of the Trust be Nevada property; or (3) that a Trustee of the Trust that has the primary administrative function is a Nevada Resident, Nevada Trust Company or Nevada Bank.

3. Any type of asset (real property, personal property, cash, stocks, bonds, jewelry, valuable collections, family heirlooms, etc.) in any location can be protected by the Nevada Spendthrift Act

4. The Nevada Spendthrift Trust Act provides protection from your own potential judgment creditors. In sum, here is how that protection is afforded:

A. Trust assets may be used only for the Health, Education, Welfare,
Maintenance and Support of the beneficiary and for no other purpose.

B. Payments and distributions by the trustee may be made only to the
beneficiary (who can also be the person establishing the trust). Payments
are in the discretion a trustee.

C. The Trust, by law, prohibits the assignment, alienation, acceleration and
anticipation of any interest of the beneficiary under the trust by the
voluntary or involuntary act of the beneficiary, or by operation of law or
any process.

D. The trustee of a spendthrift trust is required to disregard and defeat every assignment or other act, voluntary or involuntary, that is attempted
contrary to the provisions of the Nevada Spendthrift Act.

E. The trustee may not distribute from the trust to a beneficiary if the trustee knows or believes that the distribution would be seized by a creditor once it is in the beneficiary's control.

SUMMARY OF BENEFITS OF THE NEVADA SPENDTHRIFT TRUST

1. You keep control of your assets
2. You benefit from and use your own assets (need not relinquish your control of the assets)
3. You can protect any amount of assets from creditors
4. You can protect any type of asset from creditors
5. It can be used by individuals who are not Nevada residents
6. Assets are kept within the United States and not subject to overseas risks and tax and reporting problems and scrutiny
7. Less expensive and complicated than foreign/offshore asset protection
trusts which are prone to IRS audits and investigations
8. Less expensive and more protective than malpractice or other insurance
9. Peace of mind from litigation/creditor harassment
10. Trust assets may provide avoidance of becoming bankruptcy property (subject to prior transfer time limits)
11. Protects future Generation's assets
12. Protects assets with sentimental value
13. Keeps assets "in the family"
14. Can be integrated with your existing estate plan
15. Assets held in the trust avoid a probate proceeding upon your death

CAVEATS

1. If the person establishing the Trust will be a Trustee and a Beneficiary of their own Trust, another Trustee must also be appointed. This other Trustee (commonly called the "distribution trustee") must have the discretion over distribution of assets to the beneficiaries

2. 2 year Window of Exposure: [If action is taken within 2 years of the Trust's creation and transfer of assets to the Trust (or when a creditor "reasonably" should have known of the transfer), a judgment creditor can judicially attempt to recover assets that have been transferred into the Trust to satisfy the Judgment] ---- [Note: Through proper advanced planning, the Trust assets may be protected, even during the 2 year "exposure" period]

3. A small amount of inconvenience (additional bank accounts, proper procedure in distributing to beneficiaries, etc.)

The information contained in this document is not intended as legal advice. You should consult an attorney for individual advice regarding your own specific situation. Unauthorized duplication, distribution or publication of this copyrighted material is prohibited. Used with permission.
Onshore_Trust_Outlin.pdfAttached file: Nevada Onshore Trust Outline
 

Asset Protection and Estate Planning Florida Homestead Services -- Florida Homestead Exemption Act MiniBB / Asset Protection and Estate Planning /
Nevada Onshore Trusts and Estate Planning Basics
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