Asset Protection Planning
is proactive legal action that protects your assets from threats such as creditors, divorce, lawsuits and judgments. Call now to let our attorneys help you.
If you seek asset protection in a foreign jurisdiction, consider the island of Nevis trust. Nevis is the southernmost of the two island Federation of St. Kitts and Nevis. You may know of the musical “Hamilton” or the founding father who inspired the Broadway hit. If you are a fan, you may recognize Nevis as Alexander Hamilton’s birthplace. Located in the Caribbean with a population of approximately 12,000, Nevis’ asset protection laws are among the strongest on the planet. Unlike most other Caribbean countries, Nevis is not part of an agreement on international tax treaties with the U.S. In fact, it has not signed any tax treaties with another country.
Cook Islands trusts are also very popular for asset protection. Knowing this, Nevis strives to keep on the cutting edge and tends to make continuous improvements to its legislation. Neither jurisdiction recognizes foreign judgments. Nevis trust law has gone one step further and has taken the Mareva injunction off the table for creditors, which you will see below.
Few countries do not recognize foreign judgments, but Nevis is one of the rare exceptions. Asset seizure to satisfy such creditors is out of the question. Imagine the sheer cost and legal complexity of your creditor relitigating a claim in Nevis. This mountainous undertaking tends to dissuade the overwhelming majority of creditors from pursuing legal action. Those who decide to pursue such action face a very rough road.
English law permits court orders known as Mareva injunctions or freezing orders. These are the US equivalents of temporary restraining orders. Thus, it allows interim freezing of a defendant’s assets. Although Nevis’ political system is based on English law, Nevis trust law forbids the use of Mareva injunctions.
This is a good thing if you are the settlor of a Nevis trust. This is because when someone sues you, you now have use of your trust assets to mount a legal defense. It would be tragic enough if someone was able to seize all of your domestic assets. What if, on top of this, you also had a Mareva injunction freezing your trust assets? How would you pay for your legal defense? Nevis makes this nightmare scenario an impossibility.
Since Nevis does not recognize foreign judgments, what must your creditor do? Well, civil actions attempting to recover assets from a trust must be held in the Courts of the Federation of St. Kitts and Nevis. In addition, all proceedings, with the exception of any criminal complaints, are held in private. Details of such proceedings are not publishable without court approval. The Hague Convention on Trusts doesn’t apply in this island nation.
In Nevis, the standard of proof for civil actions is “beyond a reasonable doubt.” In contrast, the standard in the U.S. is the much weaker “preponderance of the evidence.” This is a big deal because it makes it very difficult for your opponent to prove his or her case against you. Moreover, the burden of proof is always on the creditor.
In addition, any creditor must hire a local lawyer in Nevis. That is not a simple task, as most lawyers have Nevis trust companies and banks as clients. Even if a creditor can find a lawyer, Nevis law does not allow contingency fees arrangements. The Nevis High Court can force the creditor to post a bond of $100,000 before filing a claim. In addition, the creditor has to pay all legal fees and expenses upfront. If the creditor loses the legal action, they must also pay the legal fees and court costs of the trust as well as the legal fees of the opponent.
Another advantage – the law separates creditor claims. So, multiple creditors cannot bring claims jointly. Even if a fraudulent transfer is proven, that does not invalidate the trust.
Note that in 2018 an amendment changed the bond amount for certain lawsuits against Nevis LLC members. The bond figure was updated to any amount that the Nevis High Court determined. This amendment, however, did not affect the $100,000 bond with respect to Nevis trusts.
With a self-settled trust, you are the settlor, the one who creates and funds the trust. You are also the beneficiary, the one who benefits from the trust. In most jurisdictions, if you hold both roles your creditor could attack your assets. Not so with a Nevis trust. In fact, Nevis law says “A settlor or trustee of a trust may also be a beneficiary of the trust.” Section 32.(4).”
A spendthrift provision is one in which your trustee can turn off the faucet when your creditors come calling. That is, you can get to the trust assets, but the trust law in Nevis keep your creditors from reaching its assets.
Confidentiality is essential in an asset protection trust. In this regard, Nevis truly delivers in the form of its Confidential Relationships Act. In fact, confidentiality and privacy is so critical in Nevis that the country does not require its corporate registry to include ownership records. That means it is virtually impossible to prove who owns what and how it was acquired. It also means that domestic online searches will not turn up any trace of Nevis trust assets. Nevis laws have no provision for financial information disclosure regarding trust operations and assets.
Nevis has no inheritance, estate or gift taxes. As the long as the transactions in a trust are conducted by non-residents, there are no annual income, capital gains, withholding, local or stamp taxes. Nevis does not levy Valued Added Taxes (VAT) or any other indirect taxes on trusts.
The US taxes its citizens and residents on worldwide income. So, this means that there is no known requirement as of this writing for additional taxes or tax filings in Nevis for a nonresident. Thus, you only need to file taxes in your home country.
The statute of limitations in Nevis for fraudulent conveyance, or fraudulent transfer, is just one to two years. Fraudulent conveyance is a civil (not a criminal) matter. It means partaking in creditor avoidance by transferring assets to another person or entity.
Under Nevis law, the limitations time period is defined as the “earliest” cause of action by the creditor against the settlor, or person putting property into the trust. The law also requires the creditor to make all possible claims against all possible parties, including any trust beneficiaries, when the claims are initially made. Failure to make such claims against other parties at the beginning means no such claims can occur in future proceedings.
Here are the Nevis trust statutes on the topic:
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.
Disposition is the action of distributing or transferring property or money. In other words, set the trust up and put your assets into it as soon as possible. Doing so will start the clock ticking. Thus, upon expiration of the requisite time your prompt action will make it nearly impossible for your creditor to attach trust assets.
Nevis was a British colony until 1983, and its political and legal system is based on that of Westminster. In Nevis, business is conducted and official documents are written in English. If you are a native English speaker, that means you do not need to have trust documents translated.
Yes, there are other countries offering strong asset protection trusts. Nevis, however, possesses another advantage that most of these countries do not. That is the matter of time zones. Nevis time is identical to Eastern Standard Time in the U.S., making it easier to contact the trustee or agent.
Hon. Mark A.G. Brantley, Nevis Premier with our CEO
Nevis is a federal parliamentary democracy and a member of the British Commonwealth with Queen Elizabeth II serving as the head of state. Her Majesty is represented by governor general acting on the prime minister’s advice. There is one National Assembly, generally consisting of about 15 members.
The credit-rating agency A.M. Best rates Nevis as moderate when it comes to economic, political and financial stability. The political parties are primarily centrist, and ideological differences are insignificant. Overall, the stability of the region is excellent.
How is this a benefit for a trust? We place a Nevis LLC inside the trust to act as your remote control to trust assets until a legal attack can threaten trust assets. You hold the bank account in the Nevis LLC. The Nevis trust owns 100% of the Nevis LLC. You are the manager. Under legal duress, your trustee steps in as manager in order to protect trust assets.
Nevis permits the establishment of single member LLCs. For asset protection purposes, that means you do not need to include other members to form such an LLC. In addition, you can place IRAs and other accounts of which you are the sole owner into the LLC. Thus, as is our standard practice, your Nevis trust can be the sole member of your LLC.
It is possible to open a Nevis trust within 48 hours of the time you provide the legally required due diligence, and the trustee receives it. That is just one example of the ease of trust establishment and maintenance. Annual trust maintenance requirements in Nevis are relatively simple. Naturally, there are shipping times and additional steps that may make this timeframe longer. Suffice it to say, you can usually set up a Nevis trust in a reasonable time as long as you do your part quickly.
The only registration requirements involve the trust name, the trustee’s name and the registered office address. Only one trustee is required, and may consist of either a corporation formed under the Nevis Business Corporation Ordinance, or a trust company that conducts business in Nevis. The settlor and beneficiaries of the trust cannot have Nevis residency. There are reasonable annual renewal costs that you pay to cover the trustee and the yearly government fees. The trust’s registered agent, in turn, is responsible for making sure annual renewal payments are made.
In most jurisdictions, trusts have limited lifespans. That is not the case in Nevis, where many trusts can last forever for all intents and purposes. Formerly, non-charitable trusts were limited to 120 years, with no time limit for charitable trusts. But changes in the law allow non-charitable trusts to exist in perpetuity.
We have relationships with to two main authors of the Nevis International Exempt Trust Ordinance. Our CEO knows personally the original author of the Act. Moreover, the one responsible for the majority of the amendments and improvements works closely with our organization and is also friends with our CEO.
The case law and research shows that Nevis trusts work. Our attorneys know of no cases where the courts have penetrated a Nevis trust. This is likely the most important benefit of all.
There are a multitude of benefits for setting up a Nevis trust. Experts call it one of the strongest tools to protect assets from lawsuits. If you want to form a Nevis trust for asset protection from lawsuits, please complete the form on this page. Alternatively, there are numbers above which you can use to speak with a consultant directly.