Nevada Spendthrift Trust
NEVADA SPENDTHRIFT TRUST – how to safeguard your property
For all of you who are oblivious to the term ‘Spendthrift Trust’, it is a trust made by the grantor (one who transfers property to the trust) at a time when he wants to transfer that property to the beneficiary (grantor’s son, grandson, etc.) but doesn’t trust that he will take care of it because of his spendthrift nature or demands of beneficiary’s creditors. The grantor appoints a trustee to make sure that the beneficiary receives a monthly or yearly payment, which he can use to pay off his creditors. A grantor must put in papers the authorities of a trustee and when and how this trust will finally dissolve. Usually, most of the states approve of formation of this trust but different governments have different takes on it and accordingly the clauses are made.
In case of Nevada Spendthrift Trust, it provides the following:
a. The state government of Nevada does not impose any personal or corporate income tax on the spendthrift trust but it is liable to pay federal income tax.
b. No other state can impose income tax on Nevada Spendthrift trust unless the trust is eligible to do business with another state.
c. The grantor of a Nevada Spendthrift trust enjoys many rights under the state of Nevada- he can change or add beneficiaries without giving out any prior intimation to any existing or past beneficiary, state of Nevada or Federal Government.
d. The Nevada Spendthrift Trust Act has all the rights and entitlements of a trust clearly spelled out and it does not rely on court rulings or any other factor.
e. A valid spendthrift trust can continue working without paying any kind of fees to the state of Nevada.
f. You need not be a resident of Nevada to enjoy the benefits under Nevada Spendthrift Trust Act.
g. Any amount and any type of assets can be protected from the creditor under this act by the grantor.
The grantor and beneficiary (can sometimes be the same person) find this trust more protective and less expensive than any other settlement like insurance, etc. Since the creditor cannot lay his hands on the property under this trust, he has no right to claim or harass the beneficiary for repayment unless the beneficiary receives his agreed income but refuses to pay off the debt. A Nevada Spendthrift Trust protects family property for use to the beneficiary and future generations and prevents it from being splurged or eaten by the creditors.
To see how the Nevada Spendthrift Trust can work for you in your asset protection plan, please give our consultants a call at 800-344-1294