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You've built something.
A business. A brand. Real estate. Investments. Maybe all of it.
So here's the uncomfortable question: What happens when someone sues you?
Not if—when.
That's where an asset protection trust comes in. But here's the thing. Most people don't understand what these actually do, what they don't do, or whether they're even legal (spoiler: they absolutely are).
I'm Lenny at CPA Attorney, LLC in Las Vegas, and this is the real breakdown of asset protection trusts—no BS, just what you actually need to know.
A cash balance plan can let a 55-year-old business owner deduct $253,300 a year, far past 401(k) limits. See how it works, what it costs, and who qualifies.
An asset protection trust is a legal tool that shields your wealth from creditors and lawsuits.
Here's how it works:
You transfer assets (cash, real estate, investments, business interests) into a trust. That trust is irrevocable—meaning you can't just take it back whenever you want. An independent trustee manages those assets. Since the assets belong to the trust (not you personally), creditors can't reach them.
The catch? The trustee still makes discretionary distributions to you. You benefit from the trust. You just don't own the assets directly.
It sounds like having your cake and eating it too. And honestly? In the right situations, that's exactly what it is.
Let's skip the hypotheticals. You run a business. One client injury. One employee dispute. One contract gone wrong. Suddenly you're facing a $500k lawsuit. You work in a high-risk profession. Doctors. Attorneys. Contractors. Real estate developers. Your professional liability exposure is real and it's constant. You have significant assets. And you've worked too hard to lose them to a judgment that wasn't even your fault. You're concerned about Medicaid planning. Assets in an asset protection trust don't count toward Medicaid eligibility thresholds. Your family keeps the inheritance instead of the state taking it for long-term care costs. You're worried about divorce. If you transfer premarital property into an asset protection trust before marriage, it stays separate property. Protected.
If any of these sound like you, this matters.
| Asset Protection Trust | LLC | Revocable Living Trust | |
|---|---|---|---|
| Creditor Protection | Strong protection from creditors | Good for business liabilities | No protection whatsoever |
| Privacy | Private, no public records | Public filing required | Private |
| Estate Tax Benefits | Can reduce estate taxes | No estate tax reduction | No estate tax reduction |
| Your Control | Limited direct control | Flexible management | Full control maintained |
| Cost | $3,000-$15,000 setup, $2,500-$5,000/year | Lower setup costs | Lower setup costs |
| Best For | Wealth protection + tax planning | Active business operations | Probate avoidance |
The truth? These aren't either/or decisions.
Smart people use LLCs for their business. Then they fund a Nevada asset protection trust with the profits. Layer them. That's how you actually protect wealth.
You're in Nevada. That's an advantage you might not even realize.
Nevada has some of the strongest asset protection trust laws in the entire country. Here's why that matters: The Statute of Limitations Is Short. You transfer assets in January 2025. By January 2027, they're protected from virtually all future creditors. Most states give creditors 4–6 years. Nevada? Two years. No Exception Creditors. Some states carve out exceptions for certain claims (ex-spouses, child support, government agencies). Nevada protects against all of them. Everything except (obviously) fraud. No State Income Tax on Trust Earnings. The trust generates income. You don't pay Nevada state tax on it. That's real money staying in your pocket. Clear and Convincing Evidence Standard. If a creditor wants to attack the trust, they have to prove you transferred assets with intent to defraud creditors. Not easy. Not cheap for them. Most don't bother. Flexibility in Administration. Nevada allows directed trusts. You can have a separate investment advisor manage the money while the trustee handles administration. You maintain influence without direct control.
You're already in the best jurisdiction in America for this. Might as well use it.
Step 1: You work with an attorney (like us). We assess your situation. What assets? What risks? What's your goal? Step 2: The trust gets drafted. It's irrevocable. It includes spendthrift language. It names an independent trustee. It protects you whilst letting you benefit from the assets. Step 3: Assets get transferred. You sign deeds. You transfer bank accounts. You move investments. It's real. It's documented. It's on the record. Step 4: The trustee takes over. They now own the assets legally. They make distributions to you at their discretion. Creditors can't force distributions. The trustee can say no. Step 5: Time passes. In Nevada, after two years, the protection is permanent for future creditors. The assets are legally removed from your reach and your creditors' reach.
That's it. It's not magic. It's just law.
Let's talk money because "investment" should make sense. Initial Setup: £2,300–£11,500 (approximately $3,000–$15,000) depending on complexity (We're on the more thorough end because we don't do this twice) Annual Trustee Fees: £1,900–£3,800+ (approximately $2,500–$5,000+) per year (Sometimes 0.5–1.5% of assets under management) Ongoing Legal/Tax Compliance: £750–£2,300 (approximately $1,000–$3,000) per year (Minimal if you maintain it properly) Total Year One: Roughly £6,000–£17,250 (approximately $8,000–$23,000) Total Annual After: Roughly £2,650–£6,000 (approximately $3,500–$8,000)
Is that expensive?
For most people, no. Not compared to losing even 10% of your assets to a judgment.
If you have $500k in assets, a lawsuit that takes just 20% of that (a conservative judgment) costs you $100k. This trust pays for itself in one incident.
But here's the thing: Don't do this just because it exists.
If you have less than $300k in assets, the maths doesn't work. If you have no liability exposure, it's overkill. If you have existing creditor claims, it won't help (more on that below).
Talk to us. We'll tell you straight whether this makes sense for your situation.
This is where people get it wrong. They Don't Protect Against Existing Claims. You already have a lawsuit pending? An IRS claim? A known creditor? Sorry. Too late. This only works for future, unknown threats. They Don't Protect Against Fraudulent Transfers. If it looks like you moved assets to avoid a specific creditor you already knew about, a court can unwind it. The definition of fraud is broad. Creditors can argue "badges of fraud" like:
They Don't Protect Marital Assets (Usually). Assets you bring into marriage as separate property? Protected. Assets earned during marriage? Not protected in a divorce. (There are exceptions in Nevada, but it's complicated.) They Don't Eliminate Taxes. Income the trust generates is still taxable to you federally. (You just don't pay Nevada state tax on it.) And when you die, estate taxes still apply (unless you structure it specifically for that). They Won't Stop Government Claims. Criminal restitution. IRS liens. Court-ordered child support. These can still reach trust assets if ordered by a court.
Here's what everyone asks: "Isn't this illegal?"
No.
Asset protection is completely legal when done correctly and for the right reasons.
Where people get in trouble:
Do it proactively. Before problems exist. For legitimate reasons. With proper documentation.
It's not illegal. Thousands of legitimate business owners, doctors, and attorneys use them.
The IRS doesn't flag them for audits. Courts don't void them if they're set up properly.
The only people who get in trouble are the ones who try to game the system.
Here's something most people miss:
Federal estate tax exemption is $13.99 million per individual right now (2025).
In 2026, it drops to $7 million.
That's huge.
You can move assets into a Nevada trust and use that exemption now. Lock it in. Future growth happens outside your taxable estate. Your heirs pay zero estate tax on the appreciation.
That's a one-time planning window.
By 2026, it closes.
If you have a net worth approaching that exemption, 2025 is when you act.
This isn't fear-mongering. This is calendar-based strategy.
Q: Can I still access my money?
A: Yes, but differently. The trustee decides whether to distribute. You don't have automatic access. You can't demand it. But for normal living expenses, the trustee typically cooperates. It's not like your money disappears.
Q: What if I get divorced?
A: Depends on timing. If you funded the trust before marriage with separate property, it's protected. If it's marital property or you funded it during marriage, it gets divided like other assets. This is state-specific and complicated. Consult before marriage if possible.
Q: Can the trustee refuse to give me money?
A: Technically yes. If you're facing a judgment or creditor claim, the trustee has the right to refuse distributions. That's actually the whole point. But in normal circumstances, they cooperate. You typically choose the trustee. Pick someone you trust.
Q: Will the IRS audit me?
A: Not because of the trust itself. The IRS audits people for tax evasion, not for legal asset protection. If the trust is documented properly and you report income correctly, there's nothing to flag.
Q: Can I change it later?
A: Limited. It's irrevocable, but there are workarounds. A trust protector can make some modifications. You can do "decanting" in Nevada to shift beneficiaries or terms. It's not locked forever, but you can't just revoke it.
Q: How long until it's protected?
A: Nevada law says two years from transfer. After that, creditors can't touch it. But you have to wait. There's no shortcut.
Q: What assets go in?
A: Real estate, investment accounts, business interests, even cryptocurrency. Basically anything except retirement accounts (those have their own protection). Talk to us about what makes sense for your situation.
Q: Can I be a trustee?
A: Not in Nevada. Well, technically you can be co-trustee, but an independent Nevada trustee has to be involved. That's the rule. It's non-negotiable.
Q: Do I need to change my lifestyle?
A: No. You still live your life. You still spend money. The trustee just approves distributions. It's not like you go broke. It's just a different legal structure.
You need an asset protection trust if:
✓ You have significant assets (typically $300k+)
✓ You work in a high-risk profession or run a business
✓ You have real liability exposure
✓ You want to maximise estate tax efficiency
✓ You're concerned about creditor claims or litigation
You probably don't need one if:
✗ Your net worth is under $250k
✗ You have no meaningful liability exposure
✗ You already have judgments or active claims against you
✗ You can't afford the annual trustee fees
✗ You need direct, immediate access to all your assets
The maths has to work.
The protection has to be worth the cost.
The structure has to fit your actual situation.
Step 1: Schedule a consultation.
We'll map out your assets, your risks, and your goals. 30 minutes. No BS.
We'll tell you straight whether this makes sense.
Step 2: If it makes sense, we assess your state.
Even though Nevada law is strong, we need to understand your broader situation.
Where do you do business?
Where do you live?
Where are your assets?
These matter.
Step 3: We draft the asset protection trust.
Properly. With every protection Nevada law allows.
No shortcuts. No templates.
Step 4: You transfer assets.
We guide you through this. It's not complicated, but it has to be done right.
Step 5: You pick a trustee and move forward.
And you sleep better knowing your wealth is protected.
An asset protection trust isn't a magic solution.
It's not illegal. It's not unethical. It's not complicated beyond reason.
It's a proven legal tool that works when it's set up properly, for the right reasons, with the right structure.
You've worked too hard to build what you have.
A single lawsuit shouldn't be able to take it all away.
If you're in Las Vegas, run a business, have significant assets, or work in a high-risk profession, this conversation is worth having.
We're here. Let's talk about whether an asset protection trust makes sense for your situation.
What's the difference between a domestic asset protection trust and an offshore trust?
Domestic trusts are set up under US law (Nevada, South Dakota, Alaska, Delaware). They're simpler and less expensive. Offshore trusts are in foreign countries and offer stronger creditor protection but are more complex and expensive ($12k+ to set up, $5k–25k annually). For most Nevada residents, domestic is the right choice.
Can I set up an asset protection trust if I'm already facing a lawsuit?
No. If there's an existing or foreseeable creditor claim, it won't work. Courts will call it a fraudulent transfer and unwind it. This only works for future, unknown threats.
Do I need an LLC and an asset protection trust?
Often, yes. An LLC protects your personal assets from business liabilities. An asset protection trust protects your personal assets from personal creditors. They work together. You run the business through an LLC. Fund it from trust assets. Double protection.
Can my spouse challenge the asset protection trust if we get divorced?
Depends on when you funded it and with what assets. Premarital assets transferred before marriage? Protected. Marital assets earned during marriage? Not protected. This is why timing matters. If marriage is coming, fund the asset protection trust first.
What happens to the asset protection trust assets if I die?
They pass to your named beneficiaries outside of probate. Your estate doesn't control them. Your heirs don't have to go through court. It's private and efficient. This is actually one of the best benefits.
Can the trustee steal my money?
Technically possible, but rare because you pick the trustee. Choose someone (or a professional trust company) with a track record. There are also backup protections and audit rights built in. This is why we recommend professional trustees for larger trusts.
Will I lose control of my assets forever?
You'll lose direct legal ownership, but you maintain practical benefit. The trustee makes distributions for your needs. You can advise them on investments (in most cases). It's not like your money disappears. It's just owned by a different legal entity.
How do I know if a Nevada trustee is legitimate?
Work with professional trust companies that are regulated and bonded. We can recommend solid options. They have liability insurance, fiduciary bonds, and regulatory oversight. Don't use your cousin's friend. Use a real company.
Can I combine an asset protection trust with my current estate plan?
Absolutely. It actually improves your estate plan. It protects assets during your lifetime and distributes them efficiently after you die. Most people who need asset protection also benefit from better estate planning overall.
Let's talk about your situation.
Not everyone needs an asset protection trust.
But if you do, the difference is substantial.
Reach out. We'll give you the real assessment.
No pressure. Just honest advice. CPA Attorney, LLC Las Vegas, Nevada
CPA Attorney Owner
Complex trusts hit the top 37% tax bracket at $15,650 of income. See how SLATs, GRATs, and GST planning protect family estates — from a CPA/attorney firm.
