Florida Trust & Probate Attorneys Blog
By Phil Rarick
All modern passenger jet planes have at least two engines. Similar reasoning applies to prenuptial agreements. Many will argue that a good prenuptial agreement should fly safely on its own without the need for a “second engine.” However, a second engine could be a Nevada Asset Protection Trust (“APT”) that could only be contested in a Nevada court. Simply by requiring a litigant to seek redress in another jurisdiction will present a strong financial and psychological deterrent to a disgruntled spouse seeking to overturn the prenuptial agreement. Two engines are safer and stronger than one!
Here are two initial objections that I hear from some of my Family Law attorney friends:
Objection #1. The less wealthy party will insist on exclusive Florida jurisdiction over all prenuptial issues
The conventional prenuptial agreement requires exclusive Florida jurisdiction over all agreement issues. The more wealthy partner can agree to such a provision with the sole exception that assets in the Nevada Trust are non-marital property and subject to the sole jurisdiction of Nevada. If Partner A is truly willing to give up all claims to certain non-marital assets then how these assets are titled or held should not be an issue.
Objection #2. Cost
A Nevada APT usually costs from $8 – 10,000. In addition, there is a yearly Trustee fee of $2,750. If the marital assets are under $1 million then a Nevada APT may be too costly. However, let’s say the assets are $1 million or more. The one time cost to establish the trust are roughly 1% of all assets; the cost to maintain the trust is .3%.
Benefits of Integrating A Nevada Asset Protection Trust with your Prenuptial Agreement
- More Robust Laws. Nevada has much stronger laws for protecting intangible assets (with the exception of 401k’s and IRA’s) than Florida. Florida does not have laws favorable to creating an APT because Florida law does not protect self-settled trusts where the grantor is also the beneficiary. Nevada and 15 other states do protect self-settled trusts. However, Nevada is routinely ranked as having the strongest laws. See Domestic Asset Protection Trust State Rankings by attorney Steve Oshins. It is one reason Nevada has become a favorite jurisdiction for California physicians seeking to protect their investments. For more information about Nevada APT’s, see Nevada Asset Protection Trust: Your Best Option?
- Bright Line. Most well drafted prenups attempt to create a bright line firewall for non-marital assets. Assets titled in a Nevada APT would have that bright line by virtue of being titled in the trust.
- Deterrence. The prenup is designed to give all parties some peace of mind that the dispute regarding property has been fully resolved and will not be reopened at a later date.
Compare the risk and cost of challenging a prenup in Florida with contesting assets held in a Nevada APT. This is not close: Nevada will be far riskier and costlier.
Conclusion
Two engines are better than one. Integrating a Nevada APT with your Prenuptial (or Post-Nuptial) Agreement can make your agreement so difficult to challenge that it will preempt such a challenge and give your client the peace of mind that they hope to achieve.
Special Note
The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.