Wealth & Lifestyle Trusts

How to Utilize a Nevada Asset Protection Trust to Safeguard Your Wealth

Building a family legacy takes tenacity, vigor, and risk. It can take years of persistence and patience, withstanding all manner of storms. Even with the most robust planning, there are certain assets that – if not properly protected – can be subject to unfortunate events such as divorce, lawsuits, and creditors. With the amount of time, energy, and effort that has gone into building your family legacy, would it make sense to secure a portion of your wealth in a vault-like estate planning vehicle?

A Nevada Asset Protection Trust is an irrevocable trust established in the state of Nevada, and can be created for those residing in any state. These trusts are subject to very specific laws and limitations, which would allow a Grantor to be named as a beneficiary of the trust while still effectively protecting the assets of the trust from creditors.

As a powerful tool within your wealth plan, it can include language mirroring your will or revocable trust, ensuring that your wealth transition is private, consistent, and that you are able to maximize the state tax savings differential between Nevada and your home state. A Nevada Asset Protection Trust also serves as a more cost effective and safer alternative to offshore trusts.

Nevada is leading the nation in legislature surrounding Asset Protection, offering one of the most secure asset protection vehicles nationwide. For over 30 years, Nevada has offered this unique planning vehicle, which successfully allows a Grantor to create a trust that provides protection of assets while simultaneously offering growth and appreciation in a state with zero income tax. Much like a vault, a Nevada Asset Protection Trust offers itself to be a secure space used to store and protect your wealth from various unanticipated threats and predators. 

Nevada Asset Protection Trust Highlights:

  • A Nevada Trust Company, or state resident, must serve as Trustee
  • Assets placed into the Trust must remain for a period of two years before becoming exempt from creditors
  • Should be funded well before potential litigation ensues – with no inference of intent to defraud a creditor
  • Grantor must delegate control through various other parties named within the trust
  • While the Trust is Irrevocable, it is important to note that the beneficiaries of the trust can be changed at a later date if necessary

First Foundation Trust is a division of First Foundation Bank, Member FDIC, Equal Housing Lender

Shelly O'Byrne, CFP®, CTFA
About the Author
Shelly O'Byrne, CFP®, CTFA
Shelly O’Byrne is the Director of Trust Services for First Foundation Bank. In this role she is responsible for growing the trust business, managing the team of trust officers and administrators, ensuring that trust clients are provided with exceptional customer service, and effectively managing risk within the trust function of the bank. Ms. O'Byrne has 20 years of experience in trust, estate and charitable trust management, working with affluent clients and their advisors. Prior to joining the firm, she worked at Bank of the West as Vice President and Senior Fiduciary Specialist managing their Newport Beach Trust office. She was the initial trust officer to join Family Wealth Advisors, their ultra-high net worth offering, and helped to build out the platform and offering, initially developing the client experience guidelines for the team. She also previously worked at Wells Fargo in trust administration and management. She currently serves as a member of the Orange County Estate Planning Council, North County Estate Planning Council and the Orange County Planned Giving Roundtable, where she is also a past board member. She holds a Bachelor of Science in Economics from the University of California Riverside and a Masters of Business Administration with an emphasis in Finance from California State University at Fullerton. She is a Certified Financial Planner, CFP, and a Certified Trust and Financial Advisor, CTFA. Read more
2018 Tax Legislation | First Foundation