Protecting Your Assets
Many people are looking to protect their assets from creditors. Nevada has favorable laws to protect those who have taken steps before a claim arises. An excellent method of asset protection is to set up a self-settled spendthrift trust, sometimes called a Nevada Asset Protection Trust.
Nevada is one of the states that permit you to create a trust for your benefit that you control and that protects assets from creditors. It takes two years before the asset protection becomes effective, and that is two years from the time assets are transferred to the trust, not two years from the time the trust was created.
A Nevada Asset Protection Trust must be in writing and be irrevocable. The trustee cannot be required to make distributions to any beneficiary including the creator of the trust. The trustee only has discretion to make such distributions. All or part of the assets must be held in Nevada. If you are the trustee and the beneficiary, you or another trustee must be a Nevada resident. This means that people who do not live in Nevada can still benefit from a Nevada Asset Protection Trust.
Assets in a Nevada Asset Protection Trust are still considered available for Medicaid and VA purposes, so while this is a great tool for general asset protection, it cannot be used solely for long-term care purposes. Other types of irrevocable trusts can protect some assets from the costs of long-term care.
Consult With An Estate Planning Attorney About Asset Protection Planning
Disclaimer: Information provided as a service of Kim Boyer, Certified Elder Law Attorney. It does not constitute legal advice. For specific questions you should consult a qualified attorney.