Nevada Asset Protection Trust Laws Improved
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Nevada’s new Domestic Asset Protection Trust (DAPT) laws became effective October 1, 2011. One new feature is the ability to move a DAPT that was established in another state to Nevada without having to start the statute of limitations period over.
For example, say you set up a DAPT in a state where there’s a four-year waiting period for protection, where the law expressly allows a divorcing spouse to pierce through the trust, and/or permits a pre-existing tort creditor to pierce through the trust. You can now transfer that trust to Nevada to take advantage of Nevada’s more protective laws without having to re-start the waiting period for protection to begin.
At two years, Nevada’s waiting period is the shortest, and it is the only state with no “exception” creditors. Check out Steve Oshin’s Domestic Asset Protection Chart for an up-to-date comparison of DAPT jurisdictions.
DAPTs do require use of a trustee in the jurisdiction in which the trust is established, but they can be used by residents of any state. Protection against court challenges for non-residents may be somewhat uncertain, but DAPTs are increasingly popular with real estate developers, physicians, and others concerned about future creditors. They are normally used in conjunction with Limited Liability Companies to provide another level of protection and more control to the trust grantor.
