Appendix J. The Nevada Asset Protection Trust

• Author: Jeffrey Robert Matsen
• Profession: Founder and managing partner of Matsen Voorhees Mintz LLP
• Pages: 115-116

115

APPENDIX

J

The Nevada Asset

Protection Trust

In most cases, when the individual who creates and transfers assets to a Trust (the maker, Trustor or

Settlor of the Trust) is also a beneficiary of that Trust, the Trust provisions will not protect the Settlor/

beneficiary’s creditors from reaching the assets of the Trust. On the other hand—as we have discussed

with Offshore Asset Protection—the law of many foreign jurisdictions provides that when a Settlor trans-

fers assets to an Offshore Asset Protection Trust, that Trust can protect the assets of the Trust even though

the Trustor is a beneficiary of the Trust.

In the late 1990s, several states began to reverse the general rule concerning Self-Settled Spend Thrift

Trusts and statutorily modified their laws accordingly. This litigation has made these types of Trusts simi-

lar to Offshore Asset Protection Trusts. Delaware, Alaska and Nevada are among the 13 states that have

adopted such legislation. The Nevada legislation was enacted in 1999 and allows the Trustor to protect

the principal of the Trust from Outside creditors even though the Trustor is a beneficiary of the Trust.

This legislation is extremely important and critical to Asset Protect Planning. For many people, the

typical Revocable Living Trust they have set up in California or elsewhere provides zero protection against

the creditors of the Settlors of the Trust, whether they have a claim arising prior to the establishment of

the Trust or after.

Under the relevant provisions of the Nevada law, at least one Trustee must be a Nevada resident.

Wealth Strategies Counsel recommends that a Trust company organized under the laws of Nevada be

the Trustee of the Nevada Asset Protection Trust. The major advantage of the Nevada laws is the shorter

period of time required for protection between the date an asset is transferred to the Trust and the date