An alternative to titling your property into an LLC is to title it into a Domestic Asset Protection Trust. Our favorite is the Nevada Self-Settled Spendthrift Trust. The State of Nevada passed several laws in 1999 which allow for the use of this type of trust and in 2009 more laws were passed which provide guidance for creating this trust. This trust differs from others because it is an irrevocable trust which is used to protect assets from creditor claims. The beneficiary does not hold legal title to any assets but still has an equitable interest in ownership in the trust assets.
Nevada asset protections trusts have a spendthrift provisions which prevents potential creditors and beneficiaries from getting access to assets in the trust.
The Grantor places assets into the irrevocable trust and remains a beneficiary of the trust. The state requires that an independent Trustee make distributions to the Grantor.
The Statute of Limitations os 2 years from the date of transfer and then assets are secure from creditor claims.
13 states authorize the use of Asset Protection Trusts. Nevada is preferable because is does not tax the income of the trust. Some states have a longer statute of limitations period. Nevada has a zero exception for creditors. Directed trusts are allowed meaning the grantor can choose an independent financial advisor to manage the funds.
You don’t have to be a Nevada Resident to setup this trust. You just need a Nevada resident Trustee or co-trustee.