Estate Planning Lawyer
When it comes to your estate plan, there are several tools that you have at your disposal. Do you worry about creditors or plaintiffs in a lawsuit accessing your wealth or assets? if you have significant wealth or assets, then you may benefit from a domestic asset protection trust. DAPTs, however, are not legal in every state. In fact, there are only 17 states that recognize a domestic asset protection trust.
If you’re curious about what a DAPT could do for you, then you may want to consider the following benefits.
Creditors Cannot Touch Domestic Asset Protection Trusts
The biggest reason for an asset protection trust is to protect your assets from creditors or from those who may file lawsuits in an attempt for quick cash. There are some industries where lawsuits are more common. For instance, if you work as a financial advisor or as a doctor, you may be more likely to face lawsuits.
While you may not be able to stop someone from filing a lawsuit against you, you can protect your assets. When the assets are in a trust, it is the trustee who has control over all the assets. They are untouchable by creditors. If you have a lot of assets or wealth and high liability, then a DAPT can be crucial.
You Still Have Rights to Your Assets in a Domestic Asset Protection Trust
To protect assets, a lot of people use irrevocable trusts where they are no longer in control of the asset. While this can still protect your assets and property from creditors, you also relinquish control of those assets. You cannot be the beneficiary in a typical trust. When it comes to a DAPT, you can be a discretionary beneficiary. This means that you are not completely giving up all of your assets in the name of protection.
When it comes to asset protection trusts, it is important to remember that they are not legal in every state. If you do not live in a state where DAPTs are possible, you can set one up in another state. However, if you choose this route, you may not be able to put real property, such as a house from another state into the trust. Since domestic asset protection trusts can be so complicated, it is important that you consult with an estate planning attorney in advance to find out if this is the right plan for you. Contact an estate planning lawyer with all your questions regarding estate planning and administration.
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