Trusts are guarded by Nevada state laws.
In America, we have one federal government and then state-level governments.
As such, states have autonomy in certain areas.
One such areas is estate planning.
According to a recent Wealth Advisor article titled “How Nevada Became America's Safest State for Wealth Protection,” the Nevada Supreme Court recently upheld the state laws guarding trusts.
What was the case?
While married, they had each put their own assets into two, separate self-settled spendthrift trusts.
What are these?
In short, these trusts are a type of irrevocable trust commonly created for asset protection purposes.
The grantor is the beneficiary, but the grantor and creditors cannot access or distribute trust assets.
Assets are distributed by a third-party trustees.
Why is this important?
Lynita sought $800,000 from Eric in alimony, child support and tuition for their daughter.
The court agreed Eric must pay.
However, in an interesting turn, these payments must come from Eric's personal assets rather than his trust.
If you are living in a state where you cannot otherwise secure this kind of protection, particularly from court-ordered alimony, then Nevada may be a good option.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Wealth Advisor (June 29, 2017) “How Nevada Became America's Safest State for Wealth Protection”