What are the Best States for Asset Protection Trusts?
There are currently at least 15 states that allow self-settled spendthrift trusts. However, there are big differences in the various state laws.
When considering what state to use for a domestic asset protection trust, a number of factors should be considered, including:
- Length of the Statute of Limitations for preexisting and future creditors
- Are there spouse and child support exceptions
- What other exceptions exist, including preexisting torts
- Ease of use – for example, is an Affidavit of Solvency required for each new asset transfer
- The standard of proof for fraudulent transfers
When considering these factors, some of the top states are South Dakota, Ohio, Tennessee, and Alaska. However, most experts consider the best state for asset protection trusts to be Nevada.
Why is Nevada the Best State for APTs?
Alaska’s statute of limitations is a lengthy 4 years, instead of 2 years. And the other states mentioned above all have exceptions for child support and/or divorcing spouses.
Nevada has a 2 year statute of limitation, no exceptions, does not require an affidavit of solvency when transferring assets to the trust, and a high “clear and convincing” standard of proof for fraudulent transfers. And Nevada does not have a state income tax!
Call (702) 894-4110 to discuss whether a Nevada asset protection trust is right for you.