What to Know About Domestic Asset Protection Trusts
If you are working on an estate plan, you probably have heard of a number of different types of trusts. One of the trusts that you may be familiar with is the domestic asset protection trust. When it comes to a DAPT, not all states allow them. In fact, the only states that do include:
- New Hampshire
- Rhode Island
- South Dakota
- West Virginia
If you are considering a DAPT, you need to make sure that you establish it in a state that allows them. If you are new to estate planning, it always helps to have a lawyer on your side, no matter how simple or complex your ideas are. Here are a few facts about DAPTs.
Trust Is Domestic
In a DAPT, the point is that it is domestic. You set the trust up in the U.S. While some people choose to have international rusts that are offshore, these tend to have different issues and complications. Whereas if you have a domestic trust, they cost less and you do not have to worry about the variety of risks associated with an offshore trust.
Trust Is Self-Settled
This means that any assets in the trust are from a permissible beneficiary. With other trusts, creditors may be able to pierce the trust. However, when it comes to a DAPT, the creditors cannot access the trust.
Trusts Have Different Rules
Keep in mind that every state has its own rules and laws when it comes to a domestic asset protection trust. If you aren’t aware of the laws in your specific state, then it might help to have a lawyer who can help guide you through the different guidelines that your state has. Your state has jurisdiction over the trust. Now, if you set up a trust in a state that does not allow domestic asset protection trusts, then your trust is at the mercy of the law, rather than the guidelines that you set down.
Domestic asset protection trusts are an effective estate planning tool. If you are on the fence about whether you should have a DAPT, you may want to seek the help of a professional. An estate planning lawyer will be able to tell you everything that you need to know about DAPTs. To find out what your best option is, consult with an estate planning lawyer, like an estate planning lawyer from Klenk Law, as soon as possible!