“Paper tigers” are things that appear fierce but are harmless in practice. This terminology frequently appears in law. Statutes that prohibit an action but are backed by nominal penalties are paper tigers. Laws that are not enforced by judges are paper tigers. Some states write laws to favor trust makers but their judges often favor creditors, litigious beneficiaries, or the IRS. The trust advantages of these states are paper tigers.

Nevada is unique. Like a true tiger, which is as fearsome as it looks, Nevada’s trust laws are just as good in practice as they look on paper.

A perfect example of this is the Nevada Supreme Court’s decision In the Matter of The William J. Raggio Family Trust issued on April 9, 2020. In Raggio, after the trust maker’s death, the trustee could distribute to the surviving spouse as much as the trustee deemed “necessary for [her] proper support, care, and maintenance…” The remainder beneficiaries of the trust, the trust maker’s two daughters, desired to preserve as much for their future benefit as possible by limiting current distributions to the surviving spouse. Because the trust document did not explicitly support their argument the daughters used another source to support their fight.

The daughters relied on the Restatement (Third) of Trusts, which is a powerful legal treatise written by legal scholars, professors, and judges. It is not specific to any state and is frequently used by judges across the country to resolve disputes. It is the Ivory Tower of legal rules and expresses, in comment (e) of §50 that the surviving spouse’s other resources limit what she receives from the trust. In essence, she must utilize her outside resources before receiving a distribution from the trust.

If you are going to purposely select a state for a legal competitive advantage, such as flexibility, security, or taxation, it is imperative that the advantage is actually available.

In the other corner, the surviving spouse countered with a rather simple argument: Nevada law specifically prohibits what the daughters’ want. Nevada Revised Statutes 163.4175 provides:

Except as otherwise provided in the trust instrument, the trustee is not required to consider a beneficiary’s assets or resources in determining whether to make a distribution of trust assets.

In short, the surviving spouse may receive distributions from the trust her husband left her without first exhausting her separate assets.

In this battle between the Ivory Tower and Nevada law, the Nevada Supreme Court ruled definitively in favor of the latter. Indeed, its opinion takes note that the Nevada legislature specifically considered and rejected the Restatement (Third) of Trusts’ position. This decision illustrates that Nevada’s favorable trust laws are not paper tigers.

This same sentiment appeared a few years earlier in another hotly contested, public case. In Klabacka v. Nelson (2017), a creditor attacked the assets of a debtor’s Nevada Asset Protection Trust (“NAPT”). Forty-eight of the fifty states would require the NAPT to pay this type of debt and the creditor argued that the court should follow the principles of the rest of the country. The court disagreed and said this about Nevada:

Despite the public policy rationale used in other jurisdictions, Nevada statutes explicitly protect [NAPTs] from the personal obligations of beneficiaries. … The legislative history of [NAPTs] in Nevada supports this conclusion. It appears that the legislature enacted the statutory framework allowing [NAPTs] to make Nevada an attractive place for wealthy individuals to invest their assets … the Legislature contemplated a framework that protected trust assets from unknown, future creditors…

This case proves that Nevada’s highest court knows Nevada’s laws are drafted to provide trust makers with unique advantages and that the court is going to enforce those laws.

In contrast, the infamous Alaska decision in Toni 1 Trust v. Wacker (2018) illustrates a classic paper tiger. Alaska, which markets itself as a superior trust jurisdiction, enacted a law intended to control attacks by creditors from other states. This law is similar to those found in many international trust jurisdictions and provides that disputes regarding an Alaska trust must be litigated in Alaska. In essence, the Alaska legislature instructed its courts to exercise their own discretion and not rely upon judgments from other states. When the creditor obtained an order from a Montana judge requiring that the trustee turn over the trust assets to the creditor, the trust maker asked the Alaska court to require that the matter be litigated in Alaska. Even after acknowledging that this request is precisely what the law was designed to do, the Alaska Supreme Court decided against him, allowing the trust assets to be taken.

Knowing that a court can set aside the law, as this case illustrates, there is no sentiment more valuable to the trust maker than believing that what (s)he wanted done will be done. If you are going to purposely select a state for a legal competitive advantage, such as flexibility, security, or taxation, it is imperative that the advantage is actually available. You put your trust in Nevada because you can rely upon Nevada to follow the law.

You put your trust in Nevada because you can rely upon Nevada to follow the law.

Nevada offers a host of competitive advantages. Famously, Nevada offers tax relief and asset protection. In addition, some families desire to foster principles of self-reliance in their heirs by withholding confidential information regarding the inheritance until the time is right, which Nevada allows. Another common concern is that the costs of administration and litigation will consume the trust assets. Nevada law provides streamlined alternatives to cut down on unnecessary costs and litigation, such as nonjudicial avenues to resolve disputes and solve an unforeseen crisis. These benefits are only as good as the court who enforces them and, as we have seen, Nevada judges enforce Nevada law.

Furthermore, Nevada laws are often enhanced because it seeks to be the best jurisdiction for wealthy trust makers. These laws, while enacted by the legislature, are authored by nationally recognized trust and tax planning attorneys who know best what benefits the wealthy trust maker seeks and needs.

Considering that it usually takes decades for a new law to be challenged in court, that progressive trust laws are relatively young in the United States, and that Nevada will continue to enhance its laws, these Nevada Supreme Court decisions carry significant value. They testify to the direction a court will lean regarding future challenges, even as it relates to future laws, giving trust makers a peace that is not offered by the other states who have negative cases or no supporting cases.

When it comes to trust planning, implementation and enforcement of a trust maker’s wishes, Nevada courts have made it clear that in Nevada, you will find no paper tigers.


Wealthgate Trust is a client-founded, Nevada-based, multi-family boutique trust company. Born from the founder’s own experiences searching for an ideal trustee solution for his family, Wealthgate Trust partners with ultra high net worth families and their advisory team to create, implement, and administer bespoke trust strategies.

Wealthgate Trust is licensed and regulated by the Nevada Financial Insurance Division (NFID), and audited separately by the NFID and two national CPA firms.


Aaron is a Wealth Strategist assisting Wealthgate Trust families and their advisors in developing and implementing bespoke estate planning strategies. He’s an attorney licensed to practice in California and Nevada, with over a decade of trust and tax planning experience, and presents on a variety of topics including wealth preservation and private trust companies.

Aaron previously served as the primary tax planning counsel for Lobb & Plewe LLP. He has represented several major trust companies and sits on the board of the Coalition for American Retirement. Aaron earned his JD from the University of Nevada, Las Vegas.

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