Taking Advantage Of Nevada Trusts And Other Asset Protection Strategies
For those who have accumulated significant wealth, holding onto those assets has always been the challenge. Asset protection refers to strategies for insulating wealth from creditors, judgments, income taxes, estate taxes and other threats.
I offer guidance for legal asset protection methods to shield family wealth and mitigate taxation, preserving those assets for future generations. We will implement different strategies depending on your asset base and your goals:
- Qualified retirement plans such as IRAs, 401(k) and 403(b) plans, as well as life insurance policies, offer creditor protection exemptions under Nevada law, federal law and bankruptcy proceedings.
- Nevada’s generous homestead exemption protects the first $605,000 in equity of your homesteaded residence, shielding the house from creditors in the event of a spouse’s death or a bankruptcy filing.
- Charitable trusts provide both tax benefits and asset protection while also enabling you to support a favorite charity during your lifetime or after you pass.
- Generation-skipping trusts, also known as dynasty trusts, are a powerful wealth-building tool because they are not subject to estate taxes when the grantor dies. The trust assets roll over, deferring the corresponding taxes to the future.
- Grantor-retained annuity trusts (GRAT) provide tax benefits to you while also mitigating estate taxes for your heirs.
- Irrevocable life insurance trusts (ILIT) are a popular asset protection strategy utilizing life insurance policies to provide for your beneficiaries.
- Spendthrift trusts can protect heirs from themselves by putting stipulations and limits on inheritance if the heir is prone to poor financial decisions.
Asset protection should be multi-pronged to maximize your tax benefits and creditor protection. My LL.M. (Master of Laws) in estate planning means that I am well-versed in the above strategies and many other possibilities, customized to your circumstances. As your attorney, I ensure each of these methods are carefully set up to comply with IRS documentation and applicable state and federal laws.
Nevada Asset Protection Trusts
Nevada has some of the most favorable laws in the country for building and preserving wealth. In fact, people with high net worth throughout the U.S. use Nevada trusts because of the added layers of asset protection.
The Nevada Asset Protection Trust (NAPT) provides distinct benefits. Namely, as an irrevocable trust, it offers excellent protection from creditors and lawsuits. Yet it also allows you as the settlor to receive distributions or oversee the investments as the trustee without forfeiting those asset protections. A Nevada trust has a duration of up to 365 years, allowing for multiple generational transfers of wealth without the tax hit. Lastly, Nevada trusts are subject only to federal income taxes as Nevada does not have a state income tax.
At least one of the trustees must be a Nevada resident or a Nevada trust company. There is a two-year window of exposure before the asset protections kick in, so the NAPT is not a short-term strategy to avoid pending creditor claims or judgments. In fact, it must not be set up with the intent to defraud or evade one’s creditors. I make sure your Nevada trust and asset protections comply with state and federal law.
Let’s Explore Your Asset Protection Options
Contact my Las Vegas firm, the Law Offices of Jaye A. Straus, LLC, for a more in-depth discussion of Nevada trusts and asset protection tailored to your needs and vision. To arrange a free initial consultation, call 702-462-5140 or email me.