What is a DAPT
There are a number of effective trust structures available to obtain asset protection; one of the most readily sought after asset protection trusts is called the DAPT – the domestic asset protection trust. This particular trust structure has the same fundamental features of an offshore trust (particularly with regards to protection from creditor claims); however DAPTs are formed exclusively in the USA with the intention of protecting an individual’s assets.
For more information on the types of trusts available, please view our asset protection services page.
DAPT explained
A DAPT is a domestic asset protection trust that replaced the FAPT – foreign asset protection trust. The DAPT was created in large part because the FAPT was considered to have a flawed structure. The purpose of a DAPT is to benefit one’s family or other relatives – also known as the beneficiaries. They involve the transfer of assets from the original owner (settlor) to the trust, and are administered by an appointed trustee.
DAPTs are highly effective wealth management and asset protection tools that aim to protect assets from creditor claims and third party claims. They are formed under a state law and are most popular in the states of Hawaii, Nevada, Alaska, Tennessee and South Dakota.
DAPT’s are said to only be effective in states which adopt the DAPT legislation or some form of asset protection law. DAPT structures do not employ any taxation on creating the trust, nor do they place any tax on the assets held in the trust. There is no limit as to the value of assets held in the trust, and almost all types of assets can be deposited into a DAPT for safeguarding, including both tangible and intangible assets.
When setting up a trust, it is advised you seek the advice and guidance of a professional consultancy firm, in order to understand the jurisdictions available to set up a DAPT structure and also to understand the benefits of one.
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