Comparison

Nevada vs. Alaska asset protection trust.

Alaska invented the domestic asset protection trust. Nevada perfected the statute, and has the only published win.

Short answer: Alaska was first (1997) and has a well-drafted statute, but its case-law record is the worst of any DAPT state, Mortensen, Huber and Toni 1 Trust are all Alaska cases, and all three went badly. Nevada has a shorter seasoning period, no exception creditors, and the only published decision in which a domestic trust actually held.

Side by side

 NevadaAlaska
Enacted19991997, the first
Seasoning, existing creditorLater of 2 years or 6 months after discoveryLater of 4 years or 1 year after discovery
Seasoning, future creditor2 years4 years
Exception creditorsNoneYes, incl. child support 30+ days in default
Burden on creditorClear and convincingClear and convincing
Solvency affidavit requiredNoYes, sworn, before funding
Published outcomesKlabacka, trust heldMortensen, Huber, Toni 1 Trust, all adverse

Reading the case law fairly

Alaska’s poor record deserves context. Huber involved a Washington settlor with Washington assets and a Washington lawyer, Alaska in name only. Toni 1 Trust involved third parties moving property while a judgment was imminent, decided entirely on default judgments. Mortensen is an unreported bankruptcy decision in which the court found unmanageable debt and multiple badges of fraud. None of them holds that a well-planned Alaska trust for an Alaska-connected settlor fails.

But there is a fair inference available too: Alaska has been marketed hardest and longest to out-of-state settlors, which is precisely the fact pattern that generates adverse decisions. Nevada’s two-year clock and absent exception creditors give it a genuine statutory edge, and Alaska’s mandatory sworn solvency affidavit, a good idea in principle, creates a document a creditor will scrutinize line by line.

Who each suits

For most clients choosing between the two on the merits today, Nevada is the stronger statute. See Nevada asset protection and Alaska asset protection trusts. And note that for a resident of a non-DAPT state, the choice between them matters far less than the domestic-versus-offshore question.

Which is right for you

On the statutes alone, Nevada. Alaska remains a legitimate jurisdiction, but its shorter list of advantages and longer list of adverse decisions make it hard to recommend over Nevada on the merits. We work across all of these jurisdictions and have since 1992, which means we can tell you candidly when the cheaper option is the right one, or when neither is. To talk it through, call (858) 755-6672.

Before you choose on price

Jurisdiction is the last decision, not the first. Timing, funding, and control determine whether any of these structures holds, see our fraudulent conveyance page and the case-law library. A cheaper jurisdiction that fits your facts beats an expensive one that does not. This page is informational and is not legal advice.

Common questions

Frequently asked

Why does Alaska have so many adverse asset protection cases?

Partly because it was first, in 1997, and has been marketed longest to out-of-state settlors, which is the fact pattern that generates conflict-of-laws problems. In Huber the settlor, assets and drafting attorney were all in Washington. None of the Alaska decisions holds that a genuinely Alaska-connected trust fails.

Is Nevada's two-year seasoning period really the shortest?

Nevada's is among the shortest, but the precise rule matters: for an existing creditor it is two years, or six months after the creditor discovers or should have discovered the transfer, whichever is later. Ohio and Tennessee use 18 months. And no state seasoning period binds a bankruptcy trustee applying the federal ten-year look-back.

This website is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Every situation is different; please consult a qualified attorney about your specific circumstances.

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