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Asset Protection Secrets™
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The Nevada Asset Protection Trust By Gary Fales Open Now to Learn the WORST Thing You Can Do With Your Wealth!
The Nevada Asset Protection Trust (“NAPT”) is a viable tool for nearly everyone. To understand why, you have to understand that if you get sued and you lose, there are only a few assets that are protected under state law. If an asset is not on the protected list, then it can be taken from you. That’s where the NAPT comes in.
How Life Insurance Protects Assets By Steven C. Fales
One strong way to protect a portion of our assets is to have life insurance. Life insurance proceeds are one of the major exemptions to judgments from creditors allowed under NRS 21.090. The exemption is defined as: “All money, benefits, privileges or immunities from life insurance where the annual premium does not exceed $15,000” It is well known that beneficiaries do not have to pay federal income taxes on death bene-
IF YOUR HOME IS UNDERWATER, THEN YOU SHOULD… OPEN THIS NEWSLETTER.
“ P ROT E C T YO U R NAKED ASSETS”
Under NRS 166, a trust can be created that protects the naked assets. Let’s say you get sued and you lose the lawsuit. At some point you will be taken to the Debtor’s Exam wherein you will be asked two general types of questions: (1) what do you own and (2) what gifts have you made. Clearly, if you are in the Debtor’s Exam, you don’t want to own any naked assets. See “NAPT” page 2.
SUCCESSFUL PERSON SHOULD HAVE UP TO $15,000 OF ANNUAL LIFE INSURANCE PREMIUMS”
fits paid to them from a life insurance policy. What is also satisfying and less well known is that after paying out premiums for years and after See “Life Insurance” page 3.
NAPT” from page 1. So in planning ahead, you can sell your naked assets, spend all the naked assets, or give them away. Selling the assets doesn’t help because the sale proceeds will still be naked. If you sell them and take back a promissory note, the note is still a naked asset that can be seized. Spending the assets could work, but then you no longer have the assets. Gifting the assets is the best solution IF you retain control. If you gift to your kids or to any other human, you’ve lost control because you cannot get the assets back without their permission. Additionally, you’ve lost control because your kids could get into a lawsuit, bankruptcy, divorce or IRS trouble. So, you need to gift the naked assets while at the same time you need to keep control.
That’s why the NAPT is wonderful. It lets you keep control while at the same time the assets in the NAPT are not considered to be in your name. Let’s go back to the Debtor’s Exam. Remember they ask you two general types of questions: (1) what you own and (2) what gifts you’ve made. If we gift the naked assets to the NAPT, then we no longer own them and we’ve successfully made it through the first line of questions. Now, they ask you about the gifts. If they find out about any gifts, then they’re going to try and reverse the gifts so they can seize the assets. Now let’s get clear that they are going to discover all gifts, including the ones to the NAPT. They are going to try and reverse the gifts by arguing Fraudulent Transfer. But if the gifts to the NAPT were made over two years ago and if such gifts to the trust were recorded in the county in
The Worst Thing…
The worst thing you can do is own assets in your own name where they can be seized by creditors.
which the property was located, then any action that the creditor is taking against the trust is barred by the NAPT statute of limitations! (If you didn’t see it, I just gave you the punch line.) More technically, the law states that an action with respect to a transfer of property to an NAPT must be brought within two years after the transfer is made or six months after the person discovers or reasonably should have discovered the transfer, whichever is later. If a person habitually placed their naked assets into the NAPT, then as time goes by they are placing those assets out of reach of their creditors while at the same time they are in control of the assets. If you’re reading this article and you have not had the thought, “Why isn’t everyone putting their naked assets into a NAPT” then you have not yet reached the point of asset protection bliss. You should own nothing and control everything because you can be sued by anyone for any reason at any time. Unless you’re a mob boss, you’re not going to have the ability to do this unless you use a NAPT or an offshore trust. If you’re in Nevada, I would highly recommend the NAPT. I will dedicate my next few columns in this newsletter to exploring the NAPT and how we can maximize its effectiveness in our own lives while at the same time minimizing any administrative burdens. GARY FALES is the managing attorney at the Law Offices of Gary L. Fales and Associates. He can be reached at 702-804-0024 or at firstname.lastname@example.org.
Life Insurance” from page 1. accumulating a substantial cash value within the policy, your growing cash value is safe from creditors as long as your annual premiums are under $15,000. Estate taxes on death benefits, however, can be a major issue if the proceeds become part of your estate. A combination of term and whole life insurance is essential in the family protection and
estate planning program of practically everyone. These concepts are integrated into the planning that we do for our clients. Just keep in mind that any successful person should have up to $15,000 of annual life insurance premiums as part of their asset protection program. It is a free exemption and a healthy one that protects your assets and your family.
A N N U I T I E S C A N R E A L L Y F I L L A N E E D … B U T A R E T H E Y A S S E T P R O T E C T E D ?
Protecting your assets is a mind set.
Some predators growl and fight like a lion. That would be a plaintiff and his or her lawyer. But there are many more subtle predators that we must watch for at all times. Our role is to help people protect their assets like a fortress protects a family.
T h a t d e p e n d s o n w h o o w n s i t !
surance company to receive a guaranteed income for a number of years or for a lifetime. But if you have a legal judgment against you, can your creditors take it away from you? The answer is yes—they can garnish the payments that exceed $4,200 per year. That is not very good protection, because a person may receive annuity income much greater than that amount. So what can be done to protect an annuity? The answer lies in the answer to this question: Can a trust own an annuity? The answer is in the affirmative: Yes, a trust can own an annuity. It can be the owner, and the payments can be to the trust. If this is an Asset Protection Trust, then the entire annuity and eventual payout is protected within your trust. It is all about ownership. STEVEN C. FALES is a principle in Fales and Fales Financial and can be reached for further information at 702-8040024 or at email@example.com
An annuity acts like a personal pension plan. You pay money into it as a lump sum or over a period of time. It grows tax deferred, and eventually you make an agreement with the in-
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