Article on Where to Set Up a Domestic Asset Protection Trust

Mark Merric & Daniel G. Worthington recently published an Article entitled, Best DAPT Jurisdictions Based on Three Types of Statutes: Analysis of Where to Set Up a Domestic Asset Protection Trust, Tr. & Est. 92 (Jan. 2017). Provided below is an abstract of the Article:

Sixteen states, or over 30 percent of the states in the United States, now have domestic assets protection trusts (DAPT) statutes. Some commentators thought that DAPT statutes would be limited to less populous states, but Ohio, for example, which is a populous state and one with a major banking center, adopted DAPT legislation. Also, at the time of this writing, both of Michigan’s legislatures passed a DAPT statute, which is waiting for the governor’s signature. This adoption would create the 17th DAPT state. While the history of asset protection trusts (APTs) is fairly recent in the United States beginning with Alaska in 1996, we anticipate that many more jurisdictions will adopt DAPT statutes. 

DAPTs are a powerful tool to help clients legally shield assets from third-party liability, while at the same time permit clients to be discretionary beneficiaries of their own trusts. 

In past articles, we gave one ranking of all the DAPT jurisdictions using the factors from the following two major types of statutes: (1) a discretionary support trust statute; and (2) the DAPT statute, which in many states is known as a “qualified disposition statute.” We’ve now deviated from this approach. We’ve added an anti-alter ego statute, and we’re now separately ranking: (1) the discretionary support trust statute; (2) the anti-alter ego statute; and (3) the DAPT statute.