Nevada’s Asset Protection Laws Strengthened

Nevada is one of the thirteen states that allow specialized asset protection trusts, and the state’s governor recenlty signed into law Senate Bill 221 which focuses on asset protection trusts. The Bill, signed into law on June 4, strengthens and expands Nevada’s asset protection trust statutes and takes effect on October 1, 2011.

Generally, other states require a four-year waiting period before an asset protection trust starts providing its benefits. Under the new Nevada law, however, the wait time is two years after the initial transfer. Nevada’s new law also has a tacking provision that allows a non-Nevada asset protection trust’s trustee to move the trust to Nevada without “restarting the clock.”

Additionally, Nevada’s new law makes it harder for creditors (even divorcing spouses and certain tort creditors) to prove that a certain transfer was done as a means of evading a specific obligation. A creditor must now show by clear and convincing evidence that a transfer violated a legal obligation or was fraudulently.

The new law also increases the number of trusts that can include asset protection. Estate planners in Nevada can now create grantor retained annuity trusts, qualified personal residence trusts, and charitable remainder trusts that incorporate asset protection.

See Kristen Simmons, New Nevada Legislation Strengthens its Asset Protection Laws, The Trust Advisor Blog, Jun. 11, 2011.