What is a Nevada Offshore Asset Protection Trust?
Nevada is one of several states that allows the creation of a trust to protect domestic assets. This is a special type of irrevocable trust in which the creator of the trust can also be a beneficiary of the trust, and have the protection of its assets that were placed in the trust. Unlike Nevada, most states, such as Texas, do not allow the trust creator to be a beneficiary and enjoy the protection of assets against creditors. The purpose of a Domestic Asset Protection Trust is to keep the trust assets safe for the beneficiaries instead of being exposed to creditors, divorces, or other risks that the beneficiary may face.
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What are the two types of Trusts for the Protection of Domestic Assets?
The two types of Asset Protection trusts are: “To third parties” and “Self-settled.” A third party trust is made by a single person for the benefit of another person, while a self-settled trust is made by a person for their own benefit. Both asset protection trusts are designed to protect the wealth of your family according to your specific needs.
I live in Texas, can I create trust like this?
Yes, we have the tools to help you! According to the law of the State of Nevada, the main requirements to create a trust for the protection of domestic assets are: at least one of the trustees of the trust must be a resident of the state of Nevada and have assets in it. There are other technical requirements that are written into the trust documents to comply with the law.
Once I transfer my assets to the trust, are they protected against my creditors immediately?
Under Nevada state law, “existing creditors” have two years to challenge the transfer of their assets to the trust as a “fraudulent transfer” with the intent to prevent or delay that particularcreditor, which is very difficult to verify. As for “future creditors” at the time the assets are transferred to the trust, they are fully protected.
What else should I know about the Trusts of Protection of Domestic Assets?
When the trust of this type is created to protect an inheritance, it can be very flexible. For example, you can make distribution rules very limited or as broad as you want. Another example is making funds only available for medical or education payments. Or, the administrator may be granted the freedom to distribute the trust funds to the beneficiary at their discretion. Finally, it is important to emphasize that to enjoy the benefits of a trust it is necessary to plan in advance, good patrimonial planning is the best way to care for the future of our loved ones.