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With
Nevada being only one of six states to adopt a
self-settled spendthrift trust statute (the other five
states being Alaska, Delaware, Utah, Rhode Island and
Oklahoma), the
issue of the trust's enforceability outside of Nevada
remains a question. However, Nevada law provides that
the enforceability of a self-settled spendthrift trust,
whether created in or outside of Nevada, will be
respected so long as: (1) all or a part of the property
transferred into the trust is located in Nevada; or (2)
the declared domicile of the trust's settlor is Nevada;
or (3) all or part of the trust's administration
(including the preparation of income tax returns and
maintaining trust records or documents) is performed in
Nevada by a qualified Nevada trustee.
Based on these requirements, the safest case would be a
spendthrift trust created by a Nevada resident, with all
its property located in Nevada, having an active Nevada
Trustee. In such a case, creditors would have an
extremely difficult time attacking such a trust. In any
event, Nevada assets transferred into a spendthrift
trust containing out of state assets (say, from
California or Arizona) would be safe from creditor
attack. Thus, the most vulnerable assets in a Nevada
spendthrift trust would be those assets located outside
of Nevada. However, out of state personal property, such
as stocks, bonds, Limited Liability Company (LLC)
interest and cash or cash equivalents, can be easily
moved to Nevada so as to be protected from future
creditors' claims..
"Self-settled"
Spendthrift Trust Statutes:
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