Nevis trust and LLC

Why the pairing works

When a Nevis trust stands on its own, it owns the assets directly, so every meaningful transaction has to go through the trustee for handling or sign-off. When a Nevis LLC stands on its own, it too owns the assets, but the settlor's membership interest remains exposed — a judgment creditor can pursue a charging order against it. Combining the two entities fixes both weaknesses. Because the trust owns the LLC membership interest, that interest sits beyond the direct reach of US enforcement. Meanwhile, through the manager role the LLC lets the settlor handle ongoing operations without the trustee having to weigh in on every deal. What you get is hands-on control over the investment portfolio alongside offshore protection sitting at the trust level.

What each layer does

The Nevis trust holds legal title to the LLC membership interest. Because a Nevis trustee outside US jurisdiction owns that interest, a creditor going after the settlor cannot get to it. This jurisdictional separation supplied by the trust layer is what the protection rests on.

The Nevis LLC holds the underlying assets — the investment portfolio, the real estate, the business holdings. Serving as the LLC's manager, the settlor operates inside boundaries the trustee has established. In that role the settlor can handle routine investment choices, trade securities, and run the company's operations, all without going to the trustee for approval on each deal. The power to strip the settlor of the manager role stays with the trustee.

The charging order advantage

In most US states the charging order is what a judgment creditor of an LLC member is limited to: they may receive distributions once the LLC pays them out, but cannot compel those distributions or seize control. That Nevis charging order law governs the Nevis LLC. Even a creditor who manages to get past the trust layer down to the LLC membership interest is confronted by Nevis charging order law on that interest. The effect is a second protective layer beneath the trust.

In the structure outlined here, the charging order layer is of limited practical benefit, since a creditor blocked from the membership interest — the trust owns it — never reaches the charging order stage at all. Still, for assets located in the US, or in situations where the trust layer itself comes under attack, the LLC-level charging order protection adds a further obstacle. See Nevis LLC charging order for the full analysis.

How it stacks up against a Cook Islands trust paired with an LLC

Cook Islands planning uses this very same pairing: a Cook Islands trust on top and a Nevis or Cook Islands LLC beneath. The underlying structural reasoning is the same. Where they diverge is the trust layer. The Cook Islands trust brings thirty years of tested case law, whereas the Nevis trust costs less. A client already relying on, or weighing, a Cook Islands trust can place a Nevis LLC beneath it and pick up the charging order protection without needing a separate Nevis trust. And for a client who has decided on Nevis as the trust jurisdiction, putting a Nevis LLC below is the obvious match.

Setting it up

First the trust is settled, then the LLC is set up either at the same time or soon afterward. As a trust asset, the LLC membership interest is taken on by the trustee. The settlor is named manager of the LLC, and the reach of that management authority is spelled out in the LLC operating agreement while remaining under the trustee's supervision as legal owner. The LLC's banking is kept apart. In short, the assets sit in the LLC and the LLC sits in the trust.

See Nevis LLC for a full account of the LLC structure and asset protection for how the two layers hold up when tested.