How is the Nevada Asset Protection Trust (Nevada Spendthrift Trust) Affected by the New Bankruptcy Law?
Recently a new Bankruptcy law went into effect. Thus there has been some concern that the new Bankruptcy law might affect some of the protection that otherwise might be afforded through a Nevada Spendthrift Trust (aka: Nevada Asset Protection Trust). The new Bankruptcy code specifically addresses “self-settled trusts” (the Nevada Spendthrift Trust or “Nevada Asset Protection Trust” is such a self-settled spendthrift trust within the meaning of the new bankruptcy law). The new Bankruptcty law with regard to self-settled spendthrift trusts (Nevada Spendthrift Trust or Nevada Asset Protection Trust) has to do with the “transfer” of property prior to filing a bankruptcy petition. Specifically, under the new bankruptcy code provision [11 U.S.C. 548(e)], the bankruptcy trustee has the power to “avoid” (aka: undo or nullify) a transfer of assets to a self-settled spendthrift trust (such as the Nevada Asset Protection Trust or Nevada Spendthrift Trust) that is made within 10 years prior to the
