Nevada Asset Protection Trust

Nevada law allows some of the most convenient options for setting up asset protection trusts in the United States. The Nevada legislature was one of the first to permit domestic asset protection trusts (DAPTs), also known as self-settled spendthrift trusts (SSST).

Individuals who set up a Nevada Asset Protection Trust enjoy several benefits discussed throughout this article.

Be sure to learn how a Nevada self-settled spendthrift trust can help you safeguard your assets and why you should consider establishing a DAPT, especially if you practice one of the high-risk professions likely to face a liability claim.

What is a Nevada Asset Protection Trust?

An asset protection trust (APT) protects the grantor’s real or personal property by shielding trust assets from the grantor’s creditors or claims against the estate. In an APT, the grantor is a permissible beneficiary who has access to trust funds, but with some limitations.

An APT is an irrevocable trust, so unlike with a revocable living trust, any assets you transfer to an APT receive a degree of protection from lawsuits. APTs in Nevada count as domestic asset protection trusts (DAPTs) since they operate within the U.S.

A DAPT is a spendthrift trust. Nevada’s spendthrift provision clause prevents the grantor’s creditors from accessing trust funds directly. Any asset distribution must be made by an independent trustee. The independent trustee controls fund withdrawals, sales of trust assets, and so forth.

A grantor can transfer many types of assets to a DAPT, including cash, stocks, real estate, and business assets. Grantors may even place a limited liability company in a trust to avoid probate or plan for incapacity.

While the trust creator gives up a significant level of control over their property when they transfer assets to a DAPT, they can still request distributions to beneficiaries and direct trust investments.

Nevada State Laws

In 1999, Nevada passed the Spendthrift Trust Act that allowed individuals to establish a self-settled spendthrift trust. In this type of trust, the grantor can also be the beneficiary. Other beneficiaries may include the grantor’s spouse, children, grandchildren, or any persons the grantor names.

In Nevada, distributions from an asset protection trust can only take place through an independent trustee. This trustee should be a Nevada trust company.

Nevada’s self-settled spendthrift trust laws help protect the beneficiary’s interest better than similar laws in many other states. Here’s why.

• Unlike most states, Nevada doesn’t tax trust income. However, federal income tax would still apply.
• In most states, DAPTs start protecting your assets after three or four years, compared to only two years after asset transfer in Nevada.
• Once property passes to an asset protection trust in Nevada, no exception creditors can claim it—not even an ex-spouse. Almost all other states recognize ex-spouses as exception creditors.
• Nevada allows directed trusts, so the trustee can appoint a fiduciary such as a financial advisor to handle some aspects of trust management.
• Nevada has some of the most flexible regulations on modifying, or decanting, an irrevocable trust.

Nevada law keeps evolving to make asset protection trusts easier to manage. A 2009 legislature recognized the role of trust protectors, who protect the beneficiary’s interest by supervising trustees and making sure the trust complies with its terms.

Nevada also protects attorneys and investment advisors involved in setting up DAPTs from third-party legal claims, unless the claimant can prove the attorney or advisor acted in bad faith and directly caused any damages suffered.

How does a Nevada Asset Protection Trust work?

When you transfer property to a Nevada Asset Protection Trust, you legally relinquish these assets. Once the statute of limitations runs out, the trust property is safe from any creditor.

Let’s say that Sam, a real estate developer, embarks on a high-risk business venture, keeping most funds himself but transferring some valuable stocks to a DAPT. When Sam’s project fails and he faces debt two years later, his creditor will have difficulty making a claim against the stocks because they now belong to the trust and the statute of limitations has expired.

A Nevada DAPT usually works in conjunction with an LLC for charging order protection. In Nevada, a charging order is the judgment creditor’s exclusive remedy, so the creditor cannot force an LLC to distribute funds.

Keep in mind that a Nevada court may reverse asset transfers to an irrevocable trust if it rules the grantor set up the trust with fraudulent intentions. A DAPT often won’t protect assets from an existing or likely future creditor.

To be safe, work with a trusted asset protection firm like our team at Blake Harris Law if you are considering setting up an asset protection trust.

Do you need to live in Nevada to form a Nevada Asset Protection Trust?

You can set up a Nevada Asset Protection Trust even if you aren’t a Nevada resident. Even foreign nationals and international businesses can set up asset protection trusts in Nevada. However, at least one trustee must be either a Nevada resident or a Nevada trust company with trust powers within the state.

The option of creating Nevada Asset Protection Trusts is a major advantage for people who need to protect their assets but would prefer to avoid the cost of setting up and maintaining an offshore trust.

Requirements to Create a Nevada Asset Protection Trust

Domestic asset protection trusts in Nevada must comply with the following requirements:

• An APT must be an irrevocable trust, however, the trust can still have a lot of flexibility.
• An APT must not require that the trust’s income or principal pass to the grantor. The grantor will receive distributions from trust funds at the discretion of a distribution trustee (whom, the grantor may choose). The grantor can also make requests for distributions.
• At least one co-trustee must be a Nevada resident or a Nevada Trust company with proper authority within the state.
• The grantor must not set up the asset protection trust with fraudulent intentions.

Do all state courts honor a Nevada Asset Protection Trust?

What happens if you transfer assets to a Nevada asset protection trust, and then your creditor, who resides outside Nevada, makes a claim against you?

Even if the creditor operates through another state’s court, Nevada Asset Protection Trusts should still safeguard the grantor’s property, provided that the claimant cannot prove fraudulent intentions.

If the trust assets include real property outside Nevada, it can complicate court rulings. Our team at Blake Harris Law can help you choose the optimal strategies for protecting each property type.

Comparing Nevada Asset Protection Trusts to DAPTs in Other States

Currently, you can set up a domestic asset protection trust in twenty states, including South Dakota, Ohio, Michigan, Alaska, and Hawaii. So how does Nevada compare to other states that recognize self-settled spendthrift trusts?

South Dakota

Like Nevada, South Dakota also has favorable DAPT laws. Nevada’s self-settled spendthrift trusts offer highly effective asset protection, but South Dakota laws are friendlier for decanting—i.e., asset transfer to a new trust with different provisions. South Dakota laws allow dynasty trusts to endure forever, whereas in Nevada, a trust expires after 365 years.

Delaware

In Nevada, any married couple can set up a community property trust, whereas in Delaware, this option only exists for state residents. Also, Delaware imposes a four-year lookback period on asset transfer to trusts for new creditors, and a one-year period for existing creditors. In Nevada, these lookback periods equal two years and six months, respectively.

In Delaware, personal property may remain in a dynasty trust in perpetuity, but real estate can only remain in a trust for 110 years.

Ohio

Ohio authorized domestic asset protection trusts comparatively recently with the Ohio Legacy Trust Act of 2013. Ohio ranks high among DAPT-friendly states. The creditor statute of limitations in Ohio is 1.5 years.

Like other DAPT states, Ohio loses to Nevada on the point of exception creditors. In Ohio, certain financial obligations like spousal support or child support override the irrevocable trust’s asset protection. In contrast, Nevada’s legislature recognizes no exception creditors.

Alaska

Similar to Delaware, Alaska implements a four-year statute of limitations on trust assets and a one-year preexisting creditor lookback period. Like South Dakota, Alaska allows dynasty trusts to last forever.

While Alaska offers excellent privacy protections for trusts, Nevada has stronger confidentiality laws. Asset protection trusts are exempt from state income tax in both Nevada and Alaska.

In all the states above, you can safeguard your wealth when you transfer assets to a DAPT. Our experienced asset protection planning attorneys at Blake Harris Law can help you understand the nuances of asset protection trusts in different states and decide which state can best accommodate your needs.

How much does a Nevada Asset Protection Trust cost?

When you consider setting up a Nevada Asset Protection Trust, you may ask how much it will cost you. The good news is that setting up a domestic trust costs less than what you would pay for an offshore trust.

Please keep in mind the costs of setting up a trust can vary depending on your plan’s legal complexity and other factors, like the value of the trust property. Contact us at Blake Harris Law for more specific information on how much you can expect to pay for an asset protection trust.

Thanks to their comparatively reasonable costs, DAPTs are a solid option for moderately high-value estates starting from about $500,000. These trusts can protect assets that belong to people in high-risk professions, like surgeons, lawyers, and real estate professionals, who face a high chance of a malpractice lawsuit throughout their careers.

Nevada Dynasty Trusts: 365-Year Perpetuity Period

One of Nevada’s most compelling features for long-term wealth preservation is its 365-year dynasty trust perpetuity period. A dynasty trust allows assets to remain in trust for multiple generations, shielded from estate taxes, creditors, and divorce claims at each generational level.

Nevada’s 365-year duration compares favorably to many states, though some jurisdictions offer even longer or unlimited perpetuity periods:

• South Dakota: Unlimited perpetuity (trusts may last forever)
• Alaska: Unlimited perpetuity
• Nevada: 365 years
• Wyoming: 1,000 years
• Delaware: Unlimited for personal property; 110 years for real estate
• Ohio: Unlimited perpetuity

While Nevada’s period is not the longest available, 365 years effectively spans more than a dozen generations—sufficient for virtually any family wealth preservation strategy. Combined with Nevada’s other advantages, including no state income tax and no exception creditors, a Nevada dynasty trust is a powerful multi-generational planning tool.

Nevada’s Directed Trust Framework

Nevada’s directed trust statute offers a sophisticated approach to trust administration that is particularly valuable for high-net-worth clients with complex portfolios. Under Nevada’s framework, trust functions can be separated among different fiduciaries, each with bifurcated liability—meaning each fiduciary is responsible only for the functions assigned to them.

The three primary trust functions that can be divided are:

• Investment Management: An investment advisor or committee directs the trust’s investment decisions, allowing the grantor to appoint a trusted financial professional to manage the portfolio.
• Distribution Authority: A distribution trustee controls when and how trust assets are distributed to beneficiaries, maintaining the independence required for asset protection.
• Administrative Functions: An administrative trustee handles record-keeping, tax filings, and day-to-day trust operations.

This separation of duties allows each function to be handled by the most qualified party while limiting each fiduciary’s exposure to liability for the others’ decisions. For asset protection purposes, the directed trust structure is particularly powerful because it allows the grantor to retain influence over investment decisions (through a chosen investment advisor) without compromising the trust’s creditor protection.

No Exception Creditors: Nevada’s Strongest Advantage

Nevada is one of only three DAPT states that recognizes no exception creditors. This is the single most important distinction between Nevada and virtually every other DAPT jurisdiction in the United States.

In most DAPT states, certain categories of creditors can reach trust assets regardless of the trust’s spendthrift provisions. These typically include:

• Former spouses with alimony or spousal support claims
• Child support claimants
• Pre-existing tort creditors
• Government tax liens

In Nevada, once the two-year statute of limitations expires after assets are transferred to the trust, no creditor of any kind can reach the trust assets. This includes ex-spouses, child support claimants, tort creditors, and contract creditors. No other category of claimant receives preferential treatment.

This absolute protection—combined with Nevada’s short two-year lookback period (compared to four years in Delaware and Alaska)—makes Nevada the premier domestic jurisdiction for individuals seeking the strongest possible trust-based asset protection within the United States.

Estate Tax Planning: The OBBBA and Nevada DAPTs

The One Big Beautiful Bill Act (OBBBA) permanently established the $15 million federal estate tax exemption (approximately $30 million for married couples), eliminating the scheduled 2026 sunset that would have cut the exemption roughly in half. This development has significant implications for Nevada DAPT planning.

With the estate tax exemption now permanent, Nevada DAPTs can be structured as long-term wealth preservation tools without the pressure of an impending sunset deadline. Clients no longer need to rush asset transfers to lock in the higher exemption amount. Instead, they can focus on the primary purpose of a DAPT: creditor protection and multi-generational wealth preservation.

Nevada’s combination of no state income tax on trust income, no exception creditors, a 365-year dynasty trust period, and the now-permanent federal estate tax exemption creates an unparalleled environment for long-term wealth planning.

The CES 2007 Trust Case: Judicial Validation of DAPTs

In 2025, the Delaware Court of Chancery issued a landmark ruling in the CES 2007 Trust case, marking the first major court validation of a domestic asset protection trust against a creditor challenge. While this case arose under Delaware law, its implications extend to all DAPT jurisdictions, including Nevada.

The court found that a properly structured DAPT—with irrevocable terms, a valid spendthrift clause, and a resident trustee—was enforceable against creditor claims. Vice Chancellor Laster affirmed the dismissal of the creditor’s challenge, providing the strongest judicial endorsement of the DAPT concept to date.

For Nevada APT clients, this ruling reinforces the legal foundation of the trust structure. Nevada’s DAPT statute is considered even more protective than Delaware’s, with a shorter statute of limitations (two years versus four years) and no exception creditors. The CES 2007 Trust decision provides additional confidence that Nevada APTs, when properly established, will be upheld by courts.

No State Income Tax on Trust Income

Nevada imposes no state income tax on trust income, making it one of the most tax-efficient jurisdictions for trust administration in the United States. This applies to all types of income earned within the trust, including capital gains, dividends, interest, and business income.

For comparison, many states impose significant income taxes on trust income, sometimes at rates exceeding 10%. By establishing a trust in Nevada with a Nevada-resident trustee, grantors can potentially avoid state-level income taxation on trust earnings. Federal income tax obligations still apply, but the elimination of state income tax can result in substantial savings over the life of the trust—particularly for dynasty trusts designed to last for multiple generations.

Combined with Nevada’s asset protection advantages, the absence of state income tax makes Nevada an exceptionally attractive jurisdiction for individuals looking to both protect and grow their wealth within a trust structure.

Contact Blake Harris Law on Setting Up a Nevada Asset Protection Trust

Are you interested in establishing a self-settled spendthrift trust in Nevada to protect your assets? Contact our legal team at Blake Harris Law, a firm that will serve your financial interests in a committed and ethical attorney-client relationship. We can help you safeguard your legacy and secure your family’s future with strategic estate planning.

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