What Is a Domestic Asset Protection Trust (DAPT)?
Introduction
Asset protection is a key component of financial security, especially for individuals with significant wealth or those in high-risk professions. A Domestic Asset Protection Trust (DAPT) is one of the most effective tools for shielding your assets from creditors and lawsuits. At DK Law Group, we specialize in setting up DAPTs to help you safeguard your wealth while maintaining some control over your assets.
What Is a Domestic Asset Protection Trust (DAPT)?
A DAPT is a type of irrevocable trust that allows you to protect your assets from creditors while still benefiting from them. Unlike traditional irrevocable trusts, where you must relinquish control of your assets, a DAPT allows you to retain some level of access to the trust’s income or principal.
How Does a DAPT Work?
Irrevocable Trust: Once assets are transferred into a DAPT, you cannot easily revoke the trust or reclaim the assets. This is what makes the DAPT effective for asset protection.
Self-Settled: The person who creates the trust (the settlor) can also be a beneficiary, meaning you can still receive distributions from the trust, subject to the discretion of the trustee.
Creditor Protection: In many states, assets in a DAPT are protected from most creditors’ claims, provided the trust was established before any legal issues or claims arose.
Real-Life Example
Consider a physician who is concerned about potential malpractice lawsuits. By placing a portion of their assets into a DAPT, the physician can protect those assets from being seized in the event of a lawsuit, while still benefiting from the income generated by the trust.
Benefits of a DAPT
Protection from Creditors: One of the primary benefits of a DAPT is that it shields your assets from creditors, making it a powerful tool for asset protection.
Continued Benefit: Unlike other asset protection strategies, a DAPT allows you to remain a beneficiary of the trust, meaning you can still enjoy the benefits of your assets.
Estate Planning: A DAPT can also be an effective estate planning tool, helping to reduce estate taxes and ensure that your wealth is passed on to your heirs according to your wishes.
Conclusion
A Domestic Asset Protection Trust offers a robust way to protect your assets while allowing you to retain some control over them. At DK Law Group, we have extensive experience in creating DAPTs tailored to your specific needs and financial goals. Contact us today to learn how a DAPT can help you secure your financial future.
At DK Law Group, we're looking to protect your assets and safeguard your future, DK Law Group is here to help you build a DAPT comfortable to your needs! For inquiries or further information, you may contact us directly at (443) 739-6724 or send an email to diana@dklawmd.com. We look forward to assisting you.