Asset Protection Trust (APT / DAPT)
Statutory self-settled spendthrift trusts designed to shield wealth from future potential liabilities.
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Overview & Purpose
A specialized irrevocable trust where the person creating the trust (grantor) may also remain a discretionary beneficiary while insulating trust assets from future, unforeseen civil judgments.
Who May Consider It
- You work in a high-liability profession (physician, surgeon, real estate developer, business owner, executive).
- You have substantial liquid or real estate wealth and want an extra defensive perimeter.
- You reside in or can establish situs in a DAPT state such as Nevada, South Dakota, Delaware, or Wyoming.
- Imposes statutory spendthrift protections preventing civil judgment creditors from seizing trust assets after the statutory seasoning period.
- Provides privacy and discretionary distribution structures managed by a qualified institutional trustee.
- Does NOT protect against current, known, pending, or reasonably foreseeable creditors (Uniform Voidable Transactions Act).
- Does NOT defeat child support, alimony, or federal tax liens.
- Does NOT allow you to conceal assets or commit fraudulent conveyance.
Important Trade-offs
- High administrative setup and ongoing institutional trustee fees ($2,000–$5,000+/year).
- Grantor cannot exercise unfettered dominion or demand distributions on demand.
Relevant Assets
Only ~20 US states allow domestic self-settled asset protection trusts. Out-of-state settlors must appoint an in-state qualified trustee.
Questions to Discuss with an Attorney
- How will courts in my home state treat a Nevada or Delaware DAPT if litigated in local court?
Related Documents
Sources & References
This article was prepared using publicly available legal and government sources. Laws change, and readers should verify current rules in their jurisdiction.
Reviewed for educational accuracy
Last reviewed: September 30, 2026 · Next scheduled review: March 2027
This article is educational information and is not legal advice. Laws vary by jurisdiction. No attorney has reviewed this material unless a named, licensed attorney is credited above.
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