330 Motor Parkway
Thank you for attending Asset Protection: From Lawsuits, Creditors, and Judgements. During the webinar, we discussed various strategies for protecting assets. We highlighted the Domestic Asset Protection Trust (“DAPT” for short) as a popular, relatively simple, and effective strategy. The DAPT is established in the United States under state law (with 19 states having some form of DAPT statutes). However, it is not necessary for you to reside in one of these states to take advantage of the DAPT. The DAPT’s primary purpose is to protect assets and property from lawsuits, civil judgements, and creditors. DAPT’s can protect a variety of assets including cash, securities, investment accounts, mutual funds, exchange traded funds, real estate, limited liability companies, and business assets such as inventory, equipment, and intellectual property.
Generally speaking, for an individual to protect assets, he or she would have to give up control, access, and ownership of those assets. The logic being, if the person no longer owns the assets, then creditors cannot attach assets that the owner no longer owns. On the other hand, if the original owner still maintains control and access, then the assets are available to the owner’s creditors. In essence, the owner is forced to decide between control/access or creditor protection. The DAPT, however, enables the owner to “have his or her cake and eat it too”. Assets transferred to the DAPT are owned by the DAPT, not the original owner. Under DAPT rules, these assets are shielded from claims made against the original owner. Nevertheless, the original owner can be a beneficiary of the DAPT and retain access and control over the assets. The grantor (original owner who creates the DAPT) reaps the dual benefit of asset protection and beneficial use of the assets. This unique feature is what makes the DAPT one of the most popular and cutting-edge asset protection mechanisms available today.
⦁ Grantor obtains dual benefit asset protection and beneficial use of assets
⦁ Viable alternative to complex, costly, offshore entities
⦁ DAPT’s can work for anyone who wants to protect assets especially high net worth individuals
⦁ No limit on amount of funds or property that can be transferred to a DAPT
⦁ DAPT can be established as dynasty trust for benefit of future generations
⦁ May avoid state tax on DAPT income if organized in a state with no income tax
⦁ DAPT’s must be irrevocable and established according to state law
⦁ Must have one qualified trustee who resides in the state where the DAPT is organized
There are no “bullet proof” asset protection strategies including the DAPT. However, as discussed in the webinar, your objective is to stack the "deck in your favor". You do this by making it highly doubtful that the Plaintiff can achieve a positive legal outcome and pierce the DAPT to reach your assets. At the same time, you significantly increase the costs and time commitment required of the Plaintiff's contingency fee attorney. When structured properly, the DAPT is extremely effective in protecting assets. It can help you to quickly reach a favorable settlement or, even better, encourage the Plaintiff to simply walk away
Asset protection strategies require the advice and assistance of a competent attorney experienced in asset protection planning. If you are interested, we can refer you to appropriate legal counsel. And like all other elements of your financial plan, all of your advisors – legal, financial and tax – should be working as a team to coordinate their efforts to produce the best results for you.
As a webinar attendee, you are entitled to a personalized Asset Protection Analysis and Recommendations Report. To request your Report, please click on the button below to schedule the initial conversation. We look forward to speaking with you soon.