Nevada is one of the few states, that has a statute that allows the creation of a self-settled spendthrift trust to protect one’s assets from creditors. As a practitioner in this state, I may be biased in saying that Nevada law is superior in the creditor protection arena but many will agree that this bias is not baseless.
In October of 1999, the Nevada State Legislature revised the “Spendthrift Trust Act of Nevada” allowing a person to create a spendthrift trust for the protection of his own assets – hence the term self-settled spendthrift trust. If created and managed correctly, a person can create a trust to which he transfers his personal assets and avail of creditor protection, even when the person is also a beneficiary of the trust. Nevada law also does not prohibit the person from serving as a trustee of the trust but it is very important that the power to make distributions to the person is at the discretion of someone else. This is where the use of professional trustees is highly beneficial.