It is unfortunate that the estate planning industry has come to view domestic asset protection trusts (DAPTs) as an equivalent to the self-settled spendthrift trust. This conflation is somewhat undesirable, as the term, “spendthrift trust,” is commonly used as a pejorative due to its regular use in hiding assets from creditors. But, whatever the name, DAPTs have a number of great benefits for settlors other than perpetrating fraud. A few benefits are: 1) protecting young adults upon receiving a large sum of wealth, 2) pre-marriage planning, 3) income tax planning, and 4) privacy. So, when it comes to considering the use of a DAPT, do not concentrate solely on the asset protection aspects of the trust in lieu of the plethora of additional benefits.
See Thomas E. Greene III, The Many Benefits of DAPTs, Wealth Management.com, January 12, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
