Trust laws have been changed in several states to allow for domestic asset protection trusts. These trusts are created in different states of the United States rather than abroad in foreign countries. This helps to avoid some of the risks that are described above in offshore trusts. Some of these states include Alaska, Delaware, Rhode Island, Utah and Nevada.

Creditors have traditionally been allowed to reach assets in self-settled trusts where the grantor retained the ability to appoint assets or income to himself. However, with society becoming increasingly litigious, different states have changed their laws to allow self-settled spendthrift trusts. Creditors are prevented from attaching a spendthrift trust, thereby protecting the assets within it.

Domestic asset protection trusts are relatively new. While state laws in the above states permit these entities, courts have not yet ruled on the laws behind these trusts and whether the assets in these trusts will be protected from creditors.

Return to: Summary of Asset Protection Methods  -  at Ourednik law offices in Jacksonville Beach, Florida.

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