Here for YOU Today and There for your FAMILY Tomorrow

What is a Domestic Asset Protection Trust?


What is a Domestic Asset Protection Trust?

Created originally by attorneys in Alaska and Delaware in 1997, there are now 17 states, including the newest addition to the DAP club, Michigan, that permit wealthy families to use a Domestic Asset Protection Trust to shield assets from creditors. The trusts are growing in popularity, but not without controversy.

Forbes’ article, “Michigan Debuts The Latest State Asset Protection Trust,” says the use of a domestic asset protection trust is a common strategy for anyone needing sophisticated estate planning.

Many people set them up with 10 or 20% of their total assets, thinking of it as a rainy-day fund for added peace of mind. But in addition to asset protection, trusts can also help save on estate taxes and move wealth from one generation to the next.

When you transfer assets into a trust for the benefit of others (like your children) and yourself, if there’s a judgment against you, the trust’s independent trustee won’t use trust assets to pay your debt. In Michigan, creditors have two years to go after DAPT assets, which is the same as in Nevada and South Dakota. However, in Delaware and Alaska, creditors have four years. Michigan lets a divorcing spouse access assets that are transferred to the trust less than 30 days before marriage—similar to Alaska. Nevada, on the other hand, doesn’t give ex-spouses owed alimony, property settlements or child support beyond its two-year statute of limitations. Michigan has an exception for child support, like most states.

The laws in each state that permit the use of DAPs vary widely, so you will need to check with an estate planning attorney to learn if your state permits the use of a DAP and what its rules are.#411Probate

Do you live in Miami-Dade, Broward, or Palm Beach counties in Florida? Laws are constantly changing-- has your estate plan been reviewed in the last 2-3 years? Call me (954-888-1747) right away for peace of mind. I can help!

  • My practice is exclusively estate planning and probate,
  • I have prepared numerous estate plans in 16 years of practice,
  • I have administered estates and trusts through Probate all over Florida,
  • I am a Certified Financial Planner Professional™, and
  • I am here for YOU today and there for your FAMILY tomorrow.

Reference: Forbes (February 10, 2017) “Michigan Debuts The Latest State Asset Protection Trust”

Why would we recommend D.T.F.? Several Reasons: Your ability to explain complex estate problems, clearly and patiently; your total lack of arrogance and pretense; a strong feeling that you are motivated by what you perceive is best for your client, rather than what would generate the largest legal fees; finally, and importantly, you are a lovely guy. A.C.

Two words cannot sum up the entire process of creating my “trust.” I enjoyed your attention to detail, your patience of explaining terms and conditions until I understood, also giving me copies to read and understand. Thank you for your suggestions on what was best for “me” but still allowing me to make my choice. Most of all, thank you for thinking of “me.” Wells Fargo said “you were the best” I cannot deny that. Again thank you very much for everything. Anna is an asset or a compliment to the firm. She is warm and very caring. It was great doing business. Thank you.