Nevada was one of the early states to adopt domestic asset protection trust legislation. The state has marketed itself aggressively as a trust-friendly jurisdiction, and if you search online for asset protection trusts, Nevada will appear near the top of every list. The marketing has worked. Many people assume Nevada is the best place to establish an asset protection trust because they have heard the name so often.
But name recognition does not equal superior protection. While the Nevada asset protection trust statute offers strong features on paper, other states have developed more comprehensive trust infrastructure and more sophisticated legal frameworks. Understanding what Nevada actually provides, and where other jurisdictions may offer advantages, matters if you are trying to protect wealth that took a lifetime to build.
What the Nevada Asset Protection Trust Statute Provides
Nevada enacted its asset protection trust statute under NRS 166. The law allows you to create a self-settled spendthrift trust, which means you can establish a trust, transfer assets into it, and remain a discretionary beneficiary. This is the core feature that makes domestic asset protection trusts work.
The statute provides a two-year statute of limitations for fraudulent transfer claims. If a creditor wants to challenge a transfer into the trust, they must do so within two years. After that window closes, the transfer is generally protected from challenge.
Nevada has no state income tax, which means trust income is not taxed at the state level. This provides a meaningful benefit for people in high-tax states who establish Nevada trusts.
On paper, this looks solid. Nevada offers the basic framework for a functioning asset protection trust. The question is whether statutory language alone provides the protection you actually need.
The Real-World Enforcement Problem
Nevada’s statute contains no exception creditor provisions, which sounds like an advantage. In theory, this means no category of creditor—including those with child support or alimony claims—receives special treatment to pierce the trust after the seasoning period expires.
But statutory language in one state does not control what happens when disputes arise elsewhere. The real question is how Nevada trusts hold up when challenged in courts outside Nevada, particularly in states that do not recognize domestic asset protection trusts or that have strong public policies favoring certain creditors.
Courts in non-DAPT states have shown willingness to apply their own laws rather than defer to the trust’s chosen jurisdiction. If your assets are located outside Nevada, if you live outside Nevada, or if a creditor obtains a judgment in another state, the protection Nevada’s statute appears to offer may not materialize. A creditor who cannot reach your assets through Nevada courts may find a path through courts in other jurisdictions.
This matters because the entire point of an asset protection trust is to keep creditors from reaching your assets. If the protection depends entirely on disputes staying within Nevada’s court system—something you cannot control—the statute’s strength on paper may not translate to strength in practice.
How Wyoming Differs
Wyoming’s asset protection trust statute was developed with input from the Wyoming Trust Association, a consortium of trust companies, attorneys, and other professionals who understood exactly what they were trying to accomplish. They studied the landscape of domestic asset protection trusts and built Wyoming’s framework to address practical realities, not just statutory language.
Wyoming has developed trust infrastructure that Nevada lacks. In 2019, Wyoming established a specialized Chancery Court to handle business and trust disputes. This court provides expedited resolution using bench trials, active case management, and limited motions practice. When disputes arise, they are decided by judges who focus on commercial and trust matters and understand the structures involved.
The Wyoming Trust Association actively maintains and improves the state’s trust code. This is not a statute that was passed decades ago and forgotten. It is a living framework that gets refined as new issues emerge and case law develops.
Wyoming also offers structural advantages:
Dynasty trusts can last up to 1,000 years for non-real property, compared to Nevada’s 365-year limit
Trust records and court documents are automatically sealed in judicial proceedings involving a trust
The state permits both single-family private trust companies and chartered family trust companies
Wyoming’s directed trust provisions allow separation of investment, distribution, and administrative functions
Wyoming does have exception creditor provisions for child support and alimony—a policy choice that reflects the state’s values. But Wyoming’s framework was designed with realistic expectations about how trusts actually function across state lines, rather than relying solely on aggressive statutory language that may not survive contact with courts in other jurisdictions.
The Marketing vs. The Infrastructure
Nevada promotes itself heavily as a business-friendly state. The marketing is everywhere. Trust mills and online formation services push Nevada because of name recognition, and because they can process Nevada trusts at volume without much customization.
This creates a situation where Nevada gets recommended not because it is necessarily the best option for a particular client’s situation but because it is the most familiar option. People hear Nevada mentioned repeatedly and assume that repetition reflects quality. It reflects marketing budget.
Attorneys who specialize in asset protection and who focus on long-term client outcomes often look beyond the marketing. When you talk to someone whose practice focuses on the full lifecycle of protecting client assets—including what happens when disputes actually arise—the conversation becomes more nuanced than simply pointing to statutory language.
The trust mills do not care which jurisdiction actually provides the best outcome for your specific situation. They care about volume and ease of processing. If you are forming a trust to check a box, Nevada works fine. If you are forming a trust because you genuinely need to protect assets and you want infrastructure that supports that protection over decades, jurisdiction selection requires more careful analysis.
Choosing the Right Jurisdiction
The best jurisdiction for an asset protection trust depends on more than statutory language. You want a jurisdiction with professional infrastructure that supports these structures. You want established processes for handling disputes. You want a legal community that takes trust administration seriously and that continues to refine the framework as issues emerge.
Wyoming, South Dakota, and Delaware each offer strong frameworks with different advantages depending on your specific situation. Wyoming’s combination of the Chancery Court, active professional oversight through the Wyoming Trust Association, strong privacy protections, and practical approach to trust administration makes it worth serious consideration for clients who are planning for the long term.
You do not have to live in any of these states to use their trust laws. A properly drafted trust under Wyoming law requires a Wyoming trustee or co-trustee, but you can remain wherever you are. Your assets can be held wherever they are. The trust’s legal domicile determines which state’s laws govern, and that is a choice you make when you establish the trust.
Substance Over Name Recognition
The Nevada asset protection trust statute provides real features. It is better than having no asset protection trust at all. But statutory language is only one piece of the puzzle.
Wyoming offers a more developed professional infrastructure with the Chancery Court and the ongoing involvement of the Wyoming Trust Association. The state’s trust community is committed to maintaining a framework that works in practice, not just on paper.
Choosing a jurisdiction based on marketing rather than substance is a mistake. When your wealth is on the line, you want protection that holds up when it matters—not just language that sounds strong in a brochure.