Special Attention for Virginia, Delaware, Florida, Nevada, and Other State Residents

A Domestic Asset Protection Trust (“DAPT”) allows individuals to transfer assets into an irrevocable trust while still retaining a beneficial interest. When properly structured, a DAPT can shield assets from future creditor claims, support long-term estate planning goals, and maintain privacy—all while giving the settlor limited access to trust benefits.

Understanding the Limits. While DAPTs can be powerful, protection is not guaranteed. Their strength depends on timing, structure, and state law.

• State Laws: Only 17 states, including Virginia and Delaware, authorize DAPTs. Delaware is known for strong creditor protection statutes, while Virginia provides similar benefits if transfers are made at least two years before a claim arises.
• Timing of Transfers: Transferring assets after a lawsuit, judgment, or financial distress may be deemed a fraudulent transfer, allowing creditors to reach those assets.
• Independent Trustee: The trust must have an independent, in-state trustee with genuine authority over distributions. Excessive control by the settlor can undermine protection.
• Exceptions: Certain obligations—such as child support, alimony, or tax liabilities—may still reach trust assets regardless of DAPT protections.

A DAPT’s effectiveness relies on strict statutory compliance and foresight. It should be created as part of a comprehensive, proactive estate plan—not as a reaction to financial pressure.

Broader Advantages. Beyond creditor protection, DAPTs can keep assets out of public probate proceedings, preserve family privacy and wealth continuity, allow discretionary distributions to beneficiaries, and complement tax and succession planning strategies.  Domestic Asset Protection Trusts can be an effective way to preserve wealth and manage risk—but not always impenetrable. Their success depends on careful drafting, independent administration, and the legal framework of the state where the trust is formed. For sound guidance, contact Weiss LLP. Our attorneys can help you evaluate whether a DAPT aligns with your financial and estate planning goals, and structure one that balances flexibility, control, and protection for years to come.