Protecting Your Assets From Creditors Through a DAPT
Self-Settled Spendthrift Trusts Lawyer
Domestic asset protection trusts (DAPT, also known as self-settled spendthrift trusts) protect assets from creditors. These trusts act like foreign offshore trusts but do not carry some of the serious income tax problems that offshore trusts face. Also, they are set up in the United States, which adds convenience and reliability.
At Armor Trust Attorneys, we focus our energy on our client's wealth preservation and transfer needs. Contact lawyer Erica Ferranti to learn what a DAPT can do to help protect your assets and avoid tax liabilities.
Benefits of DAPTs
Domestic Asset Protection Trusts carry many benefits, including:
- Trust assets are considered trust property. As trust property, they are protected from creditors.
- In some states, you (as the grantor) may have the capacity to name yourself a beneficiary, thus keeping an interest in the trust.
This means that you can put assets in a DAPT and benefit from them without fear of a creditor's hand in the game.
Setting up a DAPT
Domestic asset protection trusts are particular to states that have favorable debtor laws — Alaska, Nevada and Delaware, for example. However, Armor Trust Attorneys can help you set up a trust in one of these states, no matter where you live.
DAPTs have the same requirements as other trusts. They must also have a "spendthrift" clause, which makes it impossible for a beneficiary to transfer his or her interests (to a creditor or anyone else).
Why Not a Foreign Offshore Asset Protection Trust?
Foreign offshore asset protection trusts are used to avoid taxes on property and assets. However, the Internal Revenue Service (IRS) is now cracking down on them. If you don't report trust assets and income to the IRS, you are going to face prosecution.
Today, the idea with foreign offshore assets protection trusts is simple — if you want to do this kind of trust, be prepared to follow the money and never come back. If you are in the U.S. — even if the money is offshore — the IRS can reach you. You could even end up in jail.
Contact Armor Trust Attorneys
If you have significant assets that are greater than your current and foreseeable liabilities, you should consider a domestic asset protection trust. Contact Armor Trust Attorneys to learn more about DAPTs and other ways that we can help you protect your assets.
