12 Asset Protection Advantages of the Nevis Trust
According to a recent Florida Bar treatise, Nevis, along with the Cook Islands, are recognized as foreign jurisdictions with “the most modern and comprehensive asset protection trusts legislation.”1
Here are the multiple advantages of a Nevis Trust. References to “The Nevis Act” are to the Nevis International Exempt Trust Ordinance, 1994. For entire law, See www.meridiannev.com/PDFs/Nevis-Exempt-Trust-Ordinance.pdf
- Spendthrift provisions are valid and enforceable. A spendthrift clause is one that essentially blocks a creditor from attacking the trust assets of the beneficiary. The Nevis Act states: “Any rule of law or public policy which prevents a settlor from establishing a spendthrift or protective trust of which he is a beneficiary is hereby abolished.” Section 6.(4).
- Self-Settled Trusts are valid. This is a type of trust in which the trustmaker (also referred to as a grantor or settlor) is also the beneficiary. Florida and many other states do not provide any protection for the beneficiaries of such trusts. Nevis does. Specifically, the Nevis Act states: “A settlor or trustee of a trust may also be a beneficiary of the trust.” Section 32.(4).
- Statute of Elizabeth overruled. This statute is the original fraudulent conveyance legislation, and is the basis for fraudulent conveyance law in the United States and United Kingdom. Section 49 of the Nevis Act specifically overrules the Statute of Elizabeth.
- Confidential. The Nevis Act has strong provisions protecting the confidentiality of information for a trust legally registered in Nevis.
- Foreign judgments are not recognized. See Section 28. This means a creditor must have a trial de novo in Nevis.
- Bond. The creditor must post a $25,000 bond to pursue an action against trust property. See Section 55.
- Burden of proof. The burden of proof is on the creditor. See Section 24.(1)
- Difficult standard of proof. The standard of proof is “beyond a reasonable doubt.” This is the highest standard in the common-law system and of course is the traditional American criminal law standard. It should be contrasted with the usual, much weaker civil law standard in the United States which is “preponderance of the evidence.”
- Contingent attorney fees are not allowed. This means that the creditor will most likely have to provide a substantial retainer to the attorney before any litigation starts.
- Local Lawyer. First the creditor must find a local lawyer who will handle such a case – which could be the biggest hurdle. This will be difficult as most (and likely the best) attorneys represent the local banks and trust companies.
- Short Statute of Limitations. Nevis has a two year/one year statute of limitations as follows:
- 24.(3) A trust settled or established and a disposition to such trust shall not be fraudulent as against creditor of a settlor–
- (a) if settled, established or the disposition takes place after the expiration of 2 years from the date that such creditors cause of action accrued; or
- (b) where settled, established or the disposition takes place before the expiration of 2 years from the date that the creditors cause of action accrued, the creditor fails to commence such action before the expiration of 1 year from the date such settlement establishment or disposition took place.
- 12. Excellent track record. According to my research, and discussions with local Nevis attorneys, to date there has been no successful case of a private creditor penetrating a Nevis registered trust.
Nevis is located southwest of the Virgin Islands. It has a population of 12,000; the main city is Charleston. It is exceptionally politically stable with a 96% literacy rate – the highest in the western hemisphere. It is a sovereign country and member of the British Commonwealth. The legal system is based on English common law. The tax environment is very friendly: there is no income tax, estate or inheritance tax, or gift tax. Nevis is the birth place of Alexander Hamilton and vacation home for one of the U.S. Supreme Court justices.
For more information, contact attorney Phil Rarick, a Miami attorney focusing on estate planning and asset protection, at (305) 556-5209 or email@example.com.
1 Offshore Asset Protection Trusts, Asset Protection In Florida, by James J. Flick and Jonathan Gopman, p. 10-11, published by The Florida Bar (Third Edition, 2013)