Gifts are an excellent way to protect assets from creditor claims. However, in making a gift, you part with all incidences of ownership and you cannot get the property back, as a matter of law, if you later changed your mind. Once the gift has been made, and assuming that the gift was not made in violation of the Nevada fraudulent Conveyance statutes, your creditors cannot later attach their claims to the gifted property.
Many Nevadans aren’t aware that they can protect their homes from creditor claims by simply filing a Declaration of Homestead. A homestead declaration exempts your home from creditor attacks by protecting the equity in your home up to $550,000. Creditors won’t be able to force a sale of the property or liquidation of your estate to satisfy their claims. The homestead exemption can be made jointly with spouses, but the exemption amount is limited to only $550,000 in the aggregate. Certain creditor claims will not exempt your property from execution upon a default. Those types of claims are supplier and construction liens, mortgages, and deeds to trust. Each of these types of creditors can obtain a secured interest in your property and it is not affected by the homestead exemption statute.
Finally, Nevada law does provide limited relief from creditor claims by exempting certain personal property from execution by creditors. A complete listing of the exemptions can be found in the Nevada Revised Statutes at Sec. 21.090. The more common exemptions are as follows:
1. Farm equipment, supplies, and seed not to exceed $4,500 in value.
2. One vehicle, provided the equity does not exceed $15,000 in value.
3. 75 percent of the disposable earnings of the judgment debtor during each pay period
4. Necessary household goods, furnishings, electronics, wearing apparel, other personal effects and yard equipment that does not exceed $12,000 in value
5. Life insurance policies, as long as the annual premiums paid do not exceed $1,000.
6. IRA’s, Simplified Employee Plans, and Qualified Plans like 401(k)’s and 403(b)’s, not to exceed $500,000 in present value. ”
7. Court-ordered child support in its entirety.
8. Court-ordered alimony in its entirety.
Whatever the size of your estate, the character of your assets, or the make up of your current estate plan, no estate plan is complete without also investigating the need for asset protection. For estate planning and asset protection help, contact us today! 702-463-8700