Nevada trust for asset protection? Better make sure your trust company still exists
By Ike Devji
PRO ASSET PROTECTION
Even within the specialized asset protection legal community, professional opinions vary on the use and effectiveness of Nevada and other states' Domestic Asset Protection Trusts (DAPTs). One thing all agree on, however, is that for such a strategy to hold up to even the weakest attacks the formalities of the state's trust laws must be met to the letter.
Many Nevada DAPTs were created by attorneys in other practice areas who dabble in asset protection or by promoters with no ongoing guidance or client contact available (often not even attorneys). Because of this, I think it is inevitable that a large number of people who have purchased Nevada trusts are going to wake up one day, need to "use" their trust, and find that the trust company appointed and required by the state laws of Nevada no longer exists, or that they have moved. In this case the trust, lacking proper legal formalities under Nevada Law, would offer little or no protection at all.
The full article on the Nevada trust business and those leaving, including the oldest trust company in the state, is here: Nevada’s oldest trust company calls it quits after 107 years in business
I suspect that we will see many planners and clients caught unaware by these changes. Even worse, we will also hear tales of trust companies collecting fees and continuing to manage trusts even with their legal status revoked.
As always, we are watching the development and defensibility of the DAPT in various jurisdictions and hope to use it when and if it ever becomes a viable alternative to the proven results of international asset protection trusts. We don't feel the case law and the courts are there yet, especially given the current social and political climate that is so hostile to wealth and business owners.