Domestic Asset Protection
Since 1992, Tresp, Day & Associates has provided clients in San Diego, California, and across the United States, with domestic asset protection legal services. Our attorneys have extensive experience preparing Domestic Security Trusts (DST), Master Protection Trusts (MPT), and Domestic Asset Protection Trusts (DAPT) for a variety of clients.
Although an offshore trust is considered the strongest legal asset protection option, domestic asset protection trusts can provide adequate asset protection. The domestic asset protection lawyers at Tresp, Day & Associates can assess and guide you through the legal options that fit your unique specifications.
A DST is an irrevocable trust that has been formed in the United States for basic asset protection, estate planning, estate tax, and tax considerations. Similar to other irrevocable asset protection trust, the main purpose of a DST is to remove ownership over your assets.
“Whoever owns asset A, can lose asset A.”
Our legal asset protection experts have assisted numerous clients establish DST’s in an effort to protect their estates from outside individuals or entities. A Domestic Security Trust removes asset ownership by creating a legally recognized “ultimate owner”. This means the Domestic Security Trust owns the assets. No individual or entity owns the Trust.
A Domestic Security Trust stands alone and can not have a judgement passed against it, protecting your estate from personal creditors. The only way a creditor can access a Domestic Security Trust, is by claiming fraudulent conveyance.
Tresp, Day & Associate’s estate attorneys strongly recommend protecting your assets by establishing a Domestic Security Trust long before a creditor comes after them. Look at it like establishing flood insurance before a flood comes along. Buying insurance after the fact does nothing at all.
Often an additional entity such as an LLC, FLP, or a Corporation is created in conjunction with a DST. These enable complete control of all assets transferred into your newly created DST. These additional entities remove all legal asset ownership, rendering them lawsuit proof, while maintaining compete control of your estate.
Domestic Security Trusts are ideal for clients who are ready to start making gifts to a future generation. Gifting through the trust has multiple benefits over making gifts outright; the client can retain more control, establish asset protection, and employ planning for estate tax purposes.
Similar to a Domestic Security Trust, a Master Protection Trust is ideal for individuals seeking protection similar to an Offshore Asset Protection Trust, but are working with a limited budget. This distinction allows a Master Protection Trust to decant to an offshore jurisdiction at a later date. Meaning, an MPT can be established in the United States and later transferred to an offshore jurisdiction favorable to Offshore Asset Protection Trusts. These offshore jurisdictions are the Isle of Man, Gibraltar, Nevis, and the Cook Islands.
A Domestic Asset Protection Trust allows you to be the primary beneficiary of a self-settled trust during your lifetime. It is the only type of domestic irrevocable trust that allows this and is modeled after the Offshore Asset Protection Trust. Although DAPTs are modeled after the offshore version, because they remain in the United States court jurisdiction, they cannot carry the same level of protection.
DAPTs are fairly new and are now available in 17 states. Those states consist of: Nevada, Alaska, Delaware, Hawaii, Michigan, Mississippi, Missouri, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.
What is the best state to establish a Domestic Asset Protection Trust?
The experts at Tresp, Day & Associates favor the state of Nevada when establishing a Domestic Asset Protection Trust for your estate. Nevada has traditionally supported business owners’ rights to privacy, along with providing legal protection for their business entities.
Nevada’s courts have experience with DAPTs and a predisposition to accepting these rights while other states don’t. Nevada also has a 2 year statute of limitations for fraudulence conveyance, compared to the standard 4 year statute of limitations.
DAPT Statute of Limitations
There is a 2 year statute of limitations for fraudulent conveyance on any Domestic Asset Protection Trust established in Nevada. This timeframe gives any creditor a very limited amount of time to file a claim. However, this all goes out the window if you already have a claim against your assets when you establish your DAPT. This reinforces why it’s important to have an asset protection strategy in place long before any creditors come along. Once a Domestic Asset Protection Trust is established, a creditor must file a fraudulent conveyance claim within the statute of limitations time period. Any creditor must take action within that 2 year timeframe or they miss their chance for good.
DAPT Settlor/Beneficiary Structure
Domestic Asset Protection Trusts allow the you, the settlor, also be the primary beneficiary. This characteristic differentiates DAPTs from other “lawsuit proof” trusts in the United States. Distributions to the settlor or beneficiary are made by a special trustee, maintaining the integrity of the irrevocable trust. All assets can still be legally controlled through underlying entities.
Decanting provisions allow the future transfer of a Domestic Asset Protection Trust to an offshore jurisdiction. The decanting provision gives you an opportunity to strengthen your trust even further when the time is appropriate for you.
Tresp, Day & Associates’ Commitment To You
We know that figuring out the best protection for your estate can be overwhelming and confusing. Our attorneys are here to help you through this important decision making process.
Contact Tresp, Day & Associates, Estate Planning Attorneys & International Asset Law Firm
Domestic Asset Protection has many great advantages for someone looking to have the best in iron-clad asset protection. We will work with you to customize a strategy to best fit your current situation and future goals. To receive more in-depth information, call our office to schedule a consultation at (858) 755-6672.