Nevada On-Shore Trust

The Nevada On-Shore Trust is a Self-Settled Spendthrift Trust that serves to protect an individual’s assets while capitalizing on the State of Nevada’s favorable legislation.

The Nevada On-Shore Trust is sometimes referred to as a Nevada Asset Protection Trust, a Nevada Domestic Asset Protection Trust or a Nevada Self-Settled Spendthrift Trust. In order to highlight the nature of the Nevada On-Shore Trust, it will be referred to by the descriptive name of Nevada Self-Settled Spendthrift Trust throughout this section.

In basic terms, “a trust is a legal relationship in which one person (trustee) holds [assets] for the benefit of another (beneficiary)”.^[1] Generally, the person who creates the trust is known as the settlor (or grantor).

The three entities involved in a trust:

• Settlor. The person setting up the trust, they are sometimes referred to as a grantor or trustor.
• Trustee. The person in charge of the trust. The trustee needs to understand the rules for the type of trust he or she is managing to make sure everything in the trust stays in working order.
• Beneficiary. A trust’s beneficiary benefits from the trust in some way, usually because the person will receive some or all of the property that was placed into trust.

A spendthrift trust provides a way for individuals to secure their property to their family and loved-ones by shielding such property from creditors’ claims. Nevada law precludes a beneficiary’s creditors from accessing the assets of the trust contrary to the terms of the trust.

Once a spendthrift trust is created, a beneficiary’s interest in the income and principal of the trust, which has not yet been distributed to the beneficiary, is protected from the beneficiary’s creditors. It is only when trust income or principal is actually distributed by a trustee to the beneficiary that the beneficiary’s creditors may attempt to reach such property. However, trying to levy or attach these distributions of trust property often becomes cumbersome and prohibitively expensive for creditors.

^[1] American Bar Association (1999). The American Bar Association guide to wills and estates.