I subscribe to a financial newsletter that recently sent out an article on Nevada Asset Protection Trusts.
A Nevada Asset Protection Trust (NAPT) is a self-settled spindthrift trust, or irrevocable trust being marketed as a solution for creditor protection. Target clients for NAPTs are small businesses and professions like contractors, doctors, attorneys, engineers, developers, and other business owners that tend to get sued.
The article was fairly through on the selling side, but left out several major drawbacks. If you are looking for asset protection you may wish to consider all angles before laying out $20,000 for one of these trusts.
For the average Joe or Joan there are easier ways of protecting some of your asset. But if you have a spare million or two that you want to protect, the NAPT is a reasonable ADDITIONAL alternative.
This is far too lengthy of a topic to cover in a blog but I did want to put everyone that reads this on alert to one of the major issues concerning NAPT’s:
No court has ever ruled on whether the assets in a NAPT or APT are actually protected from creditors.
So if you put all, or most of your funds in a NAPT, you might find that a court will grant your creditor assess to your assets that are tied up and nicely gift wrapped in on place (the NAPT.)
Rule of thumb, never put your eggs (aka Money) in one basket (aka safe place, or medium, or currency.) People that really need a NAPT should seek out an attorney that they know and trust. Only 1% of millionaires would benefit from this kind of trust.
|The Sterling Law Group | Business & Estate Planning | Roseville, CA | 916-790-0852|