$97 JANUARY 2011

Law Offices of Gary L. Fales & Associates &

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Secrets™
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The Nevada Asset How Life Insurance
Protection Trust Protects Assets

By Gary Fales By Steven C. Fales

The Nevada Asset Protection Trust (“NAPT”) One strong way to protect a portion of our
Open Now to Learn the WORST Thing You Can Do With Your Wealth!
is a viable tool for nearly everyone. To understand assets is to have life insurance. Life insurance
why, you have to understand that if you get sued proceeds are one of the major exemptions to judg-
and you lose, there are only a few assets that are ments from creditors allowed under NRS 21.090.
protected under state law. If an asset is not on the The exemption is defined as:
protected list, then it can be taken from you. That’s
where the NAPT comes in. “All money, benefits, privileges or immuni-
ties from life insurance where the annual premi-
um does not exceed $15,000”

IF YOUR HOME IS “ P ROT E C T YO U R

It is well known that beneficiaries do not
have to pay federal income taxes on death bene-

UNDERWATER, THEN YOU NAKED ASSETS”

“ANYSUCCESSFUL PERSON
SHOULD HAVE UP TO $15,000
SHOULD… OPEN THIS Under NRS 166, a trust can be created that
protects the naked assets. Let’s say you get sued
OF ANNUAL LIFE INSURANCE
PREMIUMS”
and you lose the lawsuit. At some point you will be

NEWSLETTER. 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. Clear-
fits paid to them from a life insurance policy.
What is also satisfying and less well known is that
ly, if you are in the Debtor’s Exam, you don’t want after paying out premiums for years and after
to own any naked assets.
See “NAPT” page 2. See “Life Insurance” page 3.
NAPT” from page 1. That’s why the NAPT is which the property was located, then Life Insurance” from page 1. surance company to receive a
wonderful. It lets you keep con- any action that the creditor is taking estate planning program of practi- guaranteed income for a number
So in planning ahead, you trol while at the same time the against the trust is barred by the accumulating a substantial cash cally everyone. These concepts of years or for a lifetime.
can sell your naked assets, spend assets in the NAPT are not con- NAPT statute of limitations! (If you value within the policy, your are integrated into the planning But if you have a legal judg-
all the naked assets, or give them sidered to be in your name. didn’t see it, I just gave you the growing cash value is safe from that we do for our clients. Just ment against you, can your credi-
away. Let’s go back to the Debt- punch line.) creditors as long as your annual keep in mind that any successful tors take it away from you? The
Selling the assets doesn’t or’s Exam. Remember they ask More technically, the law premiums are under $15,000. Es- person should have up to $15,000 answer is yes—they can garnish
help because the sale proceeds you two general types of ques- states that an action with respect to a tate taxes on death benefits, how- of annual life insurance premiums the payments that exceed $4,200
will still be naked. If you sell tions: (1) what you own and (2) transfer of property to an NAPT ever, can be a major issue if the as part of their asset protection per year. That is not very good
them and take back a promissory what gifts you’ve made. If we must be brought within two years proceeds become part of your es- program. It is a free exemption protection, because a person may
note, the note is still a naked asset gift the naked assets to the after the transfer is made or six tate. and a healthy one that protects receive annuity income much
that can be seized. NAPT, then we no longer own months after the person discovers or A combination of term your assets and your family. greater than that amount.
Spending the assets could them and we’ve successfully reasonably should have discovered and whole life insurance is essen- So what can be done to pro-
work, but then you no longer have made it through the first line of the transfer, whichever is later. tial in the family protection and tect an annuity? The answer lies
the assets. questions. Now, they ask you If a person habitually placed A N N U I T I E S in the answer to this question:
Gifting the assets is the best about the gifts. If they find out their naked assets into the NAPT, C A N R E A L L Y Can a trust own an annuity?
solution IF you retain control. If about any gifts, then they’re go- then as time goes by they are placing F I L L A N E E D … The answer is in the affirma-
you gift to your kids or to any ing to try and reverse the gifts so those assets out of reach of their tive: Yes, a trust can own an an-
other human, you’ve lost control they can seize the assets. Now creditors while at the same time they B U T A R E T H E Y nuity. It can be the owner, and
because you cannot get the assets let’s get clear that they are going are in control of the assets. A S S E T the payments can be to the trust.
back without their permission. to discover all gifts, including If you’re reading this article If this is an Asset Protection
Additionally, you’ve lost the ones to the NAPT. They are and you have not had the thought, Protecting your P R O T E C T E D ?
Trust, then the entire annuity and
control because your kids could going to try and reverse the gifts “Why isn’t everyone putting their T h a t d e p e n d s eventual payout is protected with-
get into a lawsuit, bankruptcy, by arguing Fraudulent Transfer. naked assets into a NAPT” then you assets is a mind set. o n w h o o w n s in your trust.
divorce or IRS trouble. So, you But if the gifts to the have not yet reached the point of as- i t ! It is all about ownership.
need to gift the naked assets while NAPT were made over two years set protection bliss. You should own Some predators growl
at the same time you need to keep ago and if such gifts to the trust nothing and control everything be- STEVEN C. FALES is a prin-
control. were recorded in the county in cause you can be sued by anyone for and fight like a lion. ciple in Fales and Fales Finan-
any reason at any time. Unless An annuity acts like a per- cial and can be reached for fur-
you’re a mob boss, you’re not going That would be a sonal pension plan. You pay ther information at 702-804-
to have the ability to do this unless money into it as a lump sum or 0024 or at ste-
you use a NAPT or an offshore trust. plaintiff and his or her over a period of time. It grows ve@falesandfales.com
If you’re in Nevada, I would highly tax deferred, and eventually you
lawyer. make an agreement with the in-
The Worst Thing…
recommend the NAPT.
I will dedicate my next few
columns in this newsletter to explor-
But there are many
ing the NAPT and how we can max- more subtle predators
The worst thing you can do is imize its effectiveness in our own
lives while at the same time mini- that we must watch for
ATTEND OUR NEXT WORKSHOP
mizing any administrative burdens. “UNDERWATER AND
own assets in your own name GARY FALES is the manag- at all times. WALKING AWAY”
ing attorney at the Law Offices of
Saturday, January 29, 2011
Our role is to help
where they can be seized by Gary L. Fales and Associates. He
can be reached at 702-804-0024 or 10 am until Noon
at gfales@garyfales.com. people protect their 2451 S. Buffalo Dr, Suite 100
creditors. assets like a fortress Las Vegas, NV 89117

protects a family.

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