Asset Protection in Nevada

A Nevada resident who has done no planning already keeps a great deal of property out of a judgment creditor’s reach. Home equity up to $605,000 is protected once a homestead declaration is recorded. Life insurance is exempt without a cap, retirement accounts are exempt up to $1,000,000, and a $10,000 wildcard covers cash. Everything above those lines can be collected.

Nevada law adds two tools. A resident can put assets in a spendthrift trust for his own benefit, and a creditor chasing an LLC interest ends up with a charging order. Married couples have no tenancy by the entirety, and community property answers for the couple’s debts. An offshore trust is for the liquid assets above the exemptions.

What Nevada Protects Without Planning

Nevada’s exemptions cover a resident’s home, wages, retirement savings, life insurance and a limited amount of cash without any trust or entity. Most carry a dollar limit written into the statute, and a creditor who wins a judgment takes what sits above it.

Homestead

The homestead exemption protects $605,000 of equity in the home, and it exists only for an owner who has recorded a declaration of homestead. The declaration is a short written statement that the owner resides on the property and claims it as a homestead, signed, notarized and recorded like a deed, at any time up to the execution sale. Without it a Nevada home has no protection from a judgment creditor. Seven states protect unlimited home equity, and Nevada is not among them.

The cap measures equity, the value left after the mortgage. Nothing in the exemption stops the mortgage lender, a home-equity lender, the seller or bank that financed the purchase, a contractor’s lien, property taxes or a homeowners’ association lien. A recorded judgment lien attaches to nothing in a fully exempt Nevada homestead. Nevada’s homestead rules on the declaration, the judge-made exceptions and the sale of excess equity all start with the recorded declaration.

Wages

Nevada exempts 82 percent of a worker’s disposable earnings when gross weekly pay is $770 or less, and 75 percent when it is more, with a floor of fifty times the federal minimum hourly wage where that protects more. The rate is fixed by the worker’s gross pay on the day the writ issues, and a later raise or pay cut changes nothing until the next writ. Support orders, bankruptcy court orders and tax debts sit outside the exemption.

The exemption follows the money into the bank. Nevada defines earnings to include compensation held in a bank account, so deposited wages keep their exempt share only so long as they can be traced, first in, first out. Nine states, Nevada among them, carry the wage exemption into the account by statute; in most other states a paycheck becomes ordinary, reachable money once it is deposited. Nevada’s 75 percent wage protection trails New York’s 90 percent and California’s 80 percent, and Texas bars wage garnishment for ordinary debts altogether.

Retirement Accounts

Retirement savings are exempt up to $1,000,000 in present value across IRAs, Roth IRAs, SEP plans, 401(k)-type deferred plans and qualified pension or profit-sharing trusts, and the statute names inherited accounts as covered. In Clark v. Rameker (2014) the Supreme Court held that money in an inherited IRA does not count as retirement funds for the federal bankruptcy exemption. Eleven states, Nevada among them, have written inherited accounts into their own exemption statutes.

The exemption covers money held in the account. A withdrawal is ordinary money the day it comes out. A Nevada bankruptcy debtor takes the Nevada list. Savings above $1,000,000 are reachable, and five states, Nevada among them, cap the IRA exemption at a dollar figure; Florida protects the whole account with no cap. Nevada retirement account and IRA protection ends at a withdrawal, at the cap, and at a rollover out of an employer plan.

Life Insurance and Annuities

Life insurance is exempt in Nevada without a dollar cap and without conditions. The statute exempts every benefit “growing out of any life insurance” (NRS 21.090(1)(k)), cash value included, whoever the beneficiary is. Eight states cap that exemption at a dollar figure; Nevada and Florida do not.

Annuity payments due the owner cannot be executed on, and a creditor cannot force the owner to exercise an option under the contract or terminate it. The one exception is premium money paid with intent to defraud creditors, and even that requires the creditor to have given the insurer written notice before the insurer paid the annuitant.

Bank and Brokerage Accounts

Cash gets the least protection, unless it is traceable pay. A $10,000 wildcard covers any personal property the owner chooses, and the statute names cash, stocks, bonds and money on deposit, so a bank or brokerage account qualifies up to that figure. The wildcard also stacks on the share of a paycheck the wage exemption leaves attachable. Nevada and Tennessee, at $10,000 each, protect more plain cash than any other state.

A second rule protects a small balance automatically, even if the owner never files an exemption claim. When a creditor levies a personal account that received exempt federal benefits by electronic deposit in the previous 45 days, $2,000 stays available to the account holder, or the whole balance if it is less. Otherwise $400 stays available, except on a writ for support. The rest can be taken.

LLC Interests

A Nevada LLC interest is hard for a member’s personal creditor to reach. The creditor gets only a charging order, a court order that redirects the company’s distributions to the creditor, and the statute makes it the only remedy whether the company has a single member or several. Foreclosure on the interest is barred, and a court may order no other remedy, though the one-member rule is untested in the Nevada Supreme Court against a creditor seeking to foreclose. The creditor waits for distributions the member may never take.

Connecticut, Delaware, Texas and Wyoming bar foreclosure the same way. Nevada ranks fourth of the fifty states for the protection its law gives a resident. Whether that statute follows an owner who lives outside Nevada is unsettled. Courts split on which state’s law governs a charging order when the member and the company sit in different states.

What Nevada Leaves Exposed

A Nevada judgment creditor can reach every dollar of home equity above $605,000, and the whole home if no declaration was ever recorded. Second homes, rentals and land the owner does not live on are not homesteads at all; the exemption reaches only the home the owner lives in.

Cash, brokerage accounts and other liquid assets above the $10,000 wildcard and the small automatic floor are reachable. Retirement money above $1,000,000 is exposed as well. So are 529 deposits made after a judgment and car equity above $15,000.

Community property is exposed to the couple’s creditors. What either spouse earns or acquires during the marriage belongs to the community. A judgment on a community obligation can be collected from it. As against a creditor, Nevada law counts property as community by when it was acquired, not by the name on the title.

An LLC keeps a creditor out of the company, but a charging order still captures every distribution the member takes while it stands. A member who needs the company’s income to live on pays the creditor with it.

Community Property and a Spouse’s Creditors in Nevada

No, Nevada has no statute creating or protecting a tenancy by the entirety, so a married couple cannot shield a jointly titled account from one spouse’s creditor the way a couple in Florida or another of the entireties states can.

Nevada is a community-property state. Property either spouse acquires during the marriage belongs to both, and what each owned before the marriage, or receives afterward by gift, inheritance or a personal injury award, stays separate, income included. Neither spouse’s separate property nor his or her share of the community is liable for the other spouse’s debts contracted before the marriage.

Against a creditor, Nevada presumes property acquired during the marriage to be community until clear, certain and convincing proof shows otherwise. Either spouse’s earnings during the marriage are community funds, so a judgment on a community obligation reaches the other spouse’s paycheck as well. A written agreement between spouses can make property separate, but that changes ownership, and a spouse-to-spouse transfer made to keep a known creditor away is open to a fraudulent-transfer claim like any other transfer.

The Nevada Spendthrift Trust for a Nevada Resident

Nevada law lets a Nevadan create an irrevocable trust, name himself a beneficiary, and put the trust’s assets beyond his own creditors once a two-year window closes. The trust cannot require distributions to the settlor and cannot have been set up to hinder, delay or defraud creditors the settlor already knew about. At least one trustee must be a Nevada resident or a trust company or bank with a Nevada office.

The settlor keeps a good deal of control. He may direct investments, sit as a cotrustee, remove and replace the trustee, and veto distributions. The one power he cannot hold is to pay himself without another person’s consent.

A creditor who already existed when the transfer was made has two years after it to sue, or six months after learning of it if that comes later; a later creditor has two years. Recording the transfer starts the discovery clock. Inside that window the creditor must show, by clear and convincing evidence, a fraudulent transfer under Nevada’s fraudulent transfer act or a breach of a contract or court order.

That window belongs only to a valid spendthrift trust. Once the beneficiary is able to demand the principal, the spendthrift protection is gone, whether or not he exercises the right. A federal district court has applied that rule to send a creditor’s claim to the general four-year fraudulent-transfer period instead.

Nevada’s spendthrift trust law names no exception creditors. Support claimants, former spouses and earlier tort victims get no special access, and no solvency affidavit or insurance is required.

In Klabacka v. Nelson (Nev. 2017), the Nevada Supreme Court refused to let a divorce court take alimony and child support out of two valid Nevada self-settled trusts. The settlor still owed both personally, and the court noted that a nonbeneficiary spouse’s share of community property held in such a trust is not shielded.

For a Nevada resident the trust is a genuine layer of protection, a bonus below homestead grade, and it holds because a Nevada creditor sues in a Nevada court that applies the Nevada statute. Every domestic asset protection trust that has held up against a creditor in court was defended in the trust’s own state by a settlor who lived there.

The trust has three limits. In bankruptcy the bankruptcy trustee can look back ten years at transfers into the trust. He undoes one only by proving the settlor acted with actual intent to defraud, hinder or delay a creditor; Nevada’s two-year window does not shorten his reach. The Nevada trustee is a U.S. person who must obey a valid court order.

Land outside Nevada answers to the law of the state it sits in. In United States v. Huckaby (E.D. Cal. 2026), the trust’s own terms called it a Nevada spendthrift trust, but the asset was a California home. Nevada law controlled how the trust document was read. A creditor’s access to the land followed California law, which voids self-settled spendthrift trusts. The court declared that the government’s judgment lien could be enforced against the debtor’s one-half interest.

A Nevada asset protection trust is a domestic trust with ordinary domestic tax filings, and every party to it is inside the reach of a U.S. court. Domestic asset protection trusts in about twenty states share those limits.

Fraudulent Transfers and Criminal Exposure in Nevada

Nevada’s fraudulent transfer law lets a creditor unwind a transfer the debtor made to put assets out of reach. Two criminal statutes make the worst version of that conduct a gross misdemeanor.

Nevada uses the Uniform Fraudulent Transfer Act, NRS 112.140 through 112.250, and has not adopted the newer Uniform Voidable Transactions Act. A transfer is fraudulent, whether the creditor’s claim came first or later, if the debtor made it to hinder or delay a creditor, or to defraud one. A transfer is also fraudulent if the debtor got less than reasonably equivalent value while left with unreasonably small assets for his business or while expecting debts he could not pay.

Timing alone settles nothing. A transfer made after a lawsuit is filed can stand if the debtor received full value and kept no control. One made long before any claim can fall if the intent was to defeat creditors.

Courts judge intent from eleven listed factors. Among them are a transfer to an insider, control kept after the transfer, concealment, a suit already filed or threatened, substantially all the debtor’s assets moving at once, inadequate value, and insolvency soon afterward. A creditor has four years after the transfer to sue, and for an intentional one, a year after discovering it if that runs longer. A transfer into a valid Nevada spendthrift trust is carved out of that deadline and runs on the trust chapter’s own two-year clock; an invalid trust takes the four years.

The remedies run against the property. A court can avoid the transfer, attach or garnish the asset in the transferee’s hands, enjoin further transfers, appoint a receiver, or let the creditor levy on the asset itself. A buyer who paid reasonably equivalent value keeps the asset only if his good faith holds up objectively, and that takes showing he neither knew nor had reason to know of the transferor’s purpose.

There is no damages claim against someone who never received the property. In Cadle Co. v. Woods & Erickson (Nev. 2015), the Nevada Supreme Court held that the act gives a creditor an equitable right to the transferred property and no claim against a non-transferee. It rejected aiding-and-abetting and conspiracy theories against the law firm that had set up the debtor’s trust and entities. Nevada is among the states where a creditor has no fraudulent-transfer claim against the lawyer who advised a transfer and never held the property.

Nevada also makes fraudulent conveyances a crime. Under NRS 205.330 a party to a conveyance made to defeat, hinder or delay creditors commits a gross misdemeanor. Under NRS 205.350 a debtor who moves property out of the state, or disposes of it or hides it, meaning to defraud, hinder or delay creditors, commits the same offense. Anyone who counsels or helps is punished as a principal.

Nevada is one of the states that makes a fraudulent transfer a crime, and no Nevada court has applied either section to a debtor’s transfer in any decision on record.

The Offshore Trust for Liquid Assets Above Nevada’s Exemptions

An offshore trust puts the trustee, and the assets, outside the power of a U.S. court to compel, which is the one thing the Nevada trust cannot do. A Cook Islands trust is written under Cook Islands law, administered by a licensed trust company there, and keeps its accounts outside the United States.

A judgment from a U.S. court has no force in the Cook Islands on its own. The creditor has to sue again in a Cook Islands court, under that country’s law, and prove fraudulent intent to the criminal standard, beyond a reasonable doubt.

Two years after a creditor’s claim accrues, the Cook Islands trust statute deems a transfer to the trust free of any intent to defraud that creditor. A transfer made before the two years run out is safe as well, unless the creditor files suit on that claim inside a year of the transfer. Neither of those protections applies where the creditor’s suit was already on file at the time of the transfer.

Creditors have tested those rules in court since the late 1990s. None of them is known to have recovered anything from a properly built, properly run trust. No decision on record from a Cook Islands court has made a trustee turn trust assets over to a creditor.

Bankruptcy reaches both trusts. Section 548(e) applies to every self-settled trust, wherever it sits. It gives a bankruptcy trustee ten years to unwind a transfer into the trust when the debtor’s actual intent was to defraud a creditor, or to hinder or delay one.

Against a Nevada trust, the bankruptcy court can then order the Nevada trustee to hand the assets back. Against a Cook Islands trust the bankruptcy trustee holds an avoidance judgment and has to collect it from a trustee abroad who is outside the court’s power. The two trusts differ in the trustee’s location and in which court can bind him.

Real estate is the limit on both sides. Land answers to the courts where it sits, so a Nevada trust cannot shield a California house and neither can an offshore one. Liquid assets are the strong case.

A lawsuit already on file does not rule the trust out. A Cook Islands trust can be created after a lawsuit has been filed, and often is. The trust deed then carries a Jones clause, a provision that lets the trustee pay that one existing creditor on conditions the deed spells out. The settlor takes on more contempt exposure and negotiates from a weaker position than he would have had before the claim.

Offshore planning starts to make sense when total assets pass $1 million, or when liquid assets alone pass $500,000. A Nevada resident below that line has the Nevada trust, which is better than nothing but is no substitute for the offshore structure.

Above that line, the legal fee is a flat $15,000 for the trust by itself, rising to $20,000 if an offshore LLC is added. With the trustee’s first-year charges, the whole setup comes to roughly $21,000, or $26,000 with the LLC. Each year after that costs about $5,000, or $6,000 with the LLC, and the CPA’s foreign-trust filings run another $2,000 to $3,000.

For U.S. income tax the trust is a grantor trust. Its income lands on the settlor’s own return, and no income tax is saved. The settlor’s CPA handles the annual foreign-trust filings: Form 3520, Form 3520-A, the FBAR and Form 8938. Nevada levies no tax on personal income, so the only new reporting is federal.