One element of careful estate planning is the appropriate use of asset protection. While many estate plans are concerned with minimizing of taxes by the use of trusts and other instruments, there are additional circumstances where specialized asset protection may be useful.
Do You Need Nevada’s Unique Asset Protection Trusts?
Nevada is an ideal jurisdiction for this type of asset protection due to availability of specialized trusts, sometimes referred to as Nevada spendthrift trusts, asset protection trusts, or Nevada domestic onshore trusts.
Morris Estate Planning Attorneys have experienced working with these instruments and assisting both Nevada residents and those from out of state who need the level of asset protection from creditors that these instruments provide.
These type of trusts offer unique protection from unsecured creditors, but they have specific requirements that must be met for their protection to be effective. Our attorneys can explain the elements of these trusts and how you can protect you and your family from the threat of creditors.
The use of the Limited Liability Company (LLC) has become popular in the last few decades because it offers the personal asset protection of a corporation with the pass-through taxation of a partnership.
Nevada is the leading jurisdiction for creating LLCs because of a provision in this state that only allows creditors to use what is known as a “charging order.” This is useful, as it eliminates the power of a creditor to foreclose or obtain an ownership/control interest in the entity.
Other Forms Of Asset Protection
A comprehensive estate plan may also include other assets that contain built-in asset protection. Life insurance and annuities are generally protected in entirety, passing directly to the name beneficiary. Similarly, retirement plans and 401(k)s typically are full protected, while IRAs are generally protected up to $500,000. A personal residence is generally protected by homestead up to $550,000.