Introduction
Thinking about protecting your assets in 2025? Texas and Nevada are two of the most discussed states when it comes to domestic asset-protection trusts (DAPTs).
While Nevada often leads on precedent, Texas offers unique benefits that might surprise you. This blog compares setup costs, state tax impact, and privacy differences between Texas and Nevada.
IRS & State Code References
- IRC §671–679 – Federal trust income taxation
- Texas Trust Code §112.035 – Spendthrift trust provisions
- Nevada Revised Statutes §166 – Nevada self-settled trusts
- Texas Tax Code §171.0001 – State taxation of trusts (Franchise tax)
Comparison Table: TX vs. NV Trusts (2025)
| Feature | Texas APT | Nevada DAPT |
|---|---|---|
| Formation Fee | ~$300 | ~$500 |
| Trustee Requirement | Any TX-resident trustee | NV-resident trustee or NV trust company |
| State Income Tax | None (if structured properly) | None |
| Protection Window | 4 years (TX lookback) | 2 years (NV lookback) |
| Case Law Support | Moderate | Strong |
| LLC Ownership | Allowed | Allowed |
| Use in Real Estate Holding | Yes | Yes |
| Privacy | Moderate | High (NV allows anonymity) |
Example: Founder Structuring for IP and Crypto
Example: Arjun, a Dallas-based AI founder, holds:
- $3M in IP
- $500K in crypto
He forms a Texas trust with:
- Trustee in TX
- Spendthrift clauses
- Limited beneficiary control
Outcome: Gains asset-protection but with longer creditor lookback. Lower setup cost than NV.
Step-by-Step: Set Up a Texas APT in 2025
- Select a Trustee
Must be a Texas resident or TX-chartered trust company. - Draft Trust Agreement
Include spendthrift, discretion, and limited powers. - Fund the Trust
Avoid fraudulent conveyance—consider 4-year lookback. - Maintain Texas Nexus
Records, administration, and trustee must remain TX-based. - File IRS Form 1041 if Non-Grantor
Grantor trust income flows to Form 1040.
Conclusion
Both Texas and Nevada offer strong protection structures in 2025—but Texas may be ideal for residents seeking cost-efficiency and simplified compliance.
While Nevada has quicker protection, Texas trusts can still meet your asset-protection goals when set up properly.
Call to Action
Considering a trust to shield assets from future risks?
Schedule a consult with Anshul Goyal, CPA, EA, FCA to:
- Weigh Nevada vs. Texas tax benefits
- Structure grantor/non-grantor trust setup
- Stay IRS and state compliant from day one
Preserve your legacy with a compliant trust strategy.
https://calendly.com/anshulcpa/
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Top 5 FAQs (2025)
1. Is Texas better than Nevada for trusts?
It depends—Texas is cheaper but has a 4-year lookback vs. Nevada’s 2.
2. Do Texas trusts pay state tax?
No, if the trust avoids TX-source income or is structured as grantor.
3. Can I include crypto or equity in a Texas trust?
Yes, both are allowed.
4. Do I need to live in TX to form a Texas trust?
No, but your trustee and trust administration must be based there.
5. Can I change from Texas to Nevada later?
Yes, but it requires refiling, trust amendment, and new compliance.