http://www.denhalaw.com/?p=760
Since 1997, 13 states have enacted laws permitting self-settled trusts (often referred to as “asset protection trusts”). A self-settled trust is one wherein the settlor establishes a trust in which the settlor is a permissible beneficiary and trust assets are also protected from the creditors of the settlor. Not all jurisdictions are equal; therefore, when a client is contemplating creating a self settled asset protection trust, it is imperative to go to the jurisdiction with the most favorable laws. The following chart gives a state by state ranking of the various asset protection trust states:
http://www.oshins.com/images/DAPT_Rankings.pdf
As reflected in the chart, Nevada offers several key advantages and therefore should always be the go to state for creating and forming a self settled trust. Specifically, Nevada (along with South Dakota) has the shortest statute of limitations period, which is two years. This means, assuming there are no pre-existing creditor issues, two years from the date assets are transferred into the trust they should be protected from the settlors creditors (assuming there are no fraudulent conveyance issues). Further, Nevada is the only jurisdiction that does not provide for exception creditors. All other jurisdictions provide for some type of exception creditors, such as divorcing spouses or preexisting torts. Essentially, this means that in other jurisdictions, even if you have made it past the statute of li...
