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The 6 Most Common Myths about a Nevada Asset Protection Trusts

Dispelling the common myths and misconceptions

In addition, there are a number of common misconceptions about personal asset protection that are important to dispel:

  1. “I have a corporation (or an LLC or other business entity), so I already have asset protection.” Business planning/entity structure alone will not protect your personal assets. LLCs and other business entities can play an important part of your personal asset protection plan, but having an LLC or Corporation that you do business with, is not personal asset protection planning.
  2. “I have a Living Trust, so my assets are protected.” A Revocable Living Trust will not protect your assets. (Living Trusts and Wills are great estate planning tools but they do not protect your personal assets from potential judgment creditors, bankruptcy, etc.)
  3. “I have put all of my assets into a corporation, so I am protected.” Putting your personal assets into a corporation will not necessarily protect those assets from loss to personal judgment creditors (although the State of Nevada has recently added the charging order protection feature to corporations with between 2 and 75 shareholders – Nevada is the only state that offers this protection of Corporate shares from personal judgement creditors).
  4. “I can transfer my assets to protect them if I am sued.” Transferring assets or setting up the protective structure after the threat has arisen may not protect the assets. Preplanning before the issue arises is critical.
  5. “I can protect my real estate properties by putting them into a Land Trust.” A properly devised Land Trust can protect assets that are held in the Trust. However, generally, the way most Land Trusts are set up, they will not provide actual protection.
  6. “If I put all of my assets in my wife’s or in my brother’s name, I don’t have to worry, because everything is protected.”