Domestic Asset Protection Trust DAPT

Learn how a Nevada Domestic Asset Protection Trust shields, protects, and preserves your assets, reduces your risk, and maintains your net worth.

A Nevada Domestic Asset Protection Trust DAPT is a powerful tool not only to avoid probate like a revocable living trust, but a DAPT provides asset protection.  Nevada is clearly ranked the top state in the nation to protect against creditors because of Nevada’s strong legal protections, no state income tax, and one of the shortest statute of limitations on creditor claims – only two years!

How Does Domestic Asset Protection Trust Work?

A Domestic Asset Protection Trust is an irrevocable trust; however, although it is irrevocable it is still amendable and changeable through certain powers and rights vested in protectors of the trust.  As the creator or trustor or grantor of the Domestic Asset Protection Trust you are able to: 

  • Transfer assets into the Domestic Asset Protection Trust free of federal gift taxes, 
  • Appoint an independent trustee to authorize distributions, 
  • Appoint yourself to maintain control of the investment decisions, and 
  • Still be permitted to be a permitted beneficiary of the trust corpus and all income.  

 

In other words, you can receive all the benefits of the trust – use all the assets and get all the income while Nevada law allows you to protect and shield assets from future creditors.  In the past, when transferring assets to an irrevocable trust you would have to “gift away assets” which requires filing Form 709 – Gift Tax Return with the IRS, and then you would never be able to benefit from the assets.  However, with Nevada Domestic Asset Protection Trusts, you not only get creditor protection, but you also still own and can use all of the assets.

6 Major Benefits of Nevada Domestic Asset Protection Trust DAPT

  1. Nevada has the strongest and best asset protection laws in the entire nation.  This means that there is no need to transfer assets offshore in the Cook or Cayman Islands when you can benefit from the DAPT in the U.S. 
  2. Nevada has no state income tax. 
  3. No residency requirement.  You can create a Nevada Domestic Asset Protection Trust and not step one foot into the State of Nevada.  
  4. DAPTs provide huge estate planning benefits because what is the point of preparing a last will and testament and a revocable living trust if you lose all your assets during your lifetime?  Asset protection preserves and guarantees that you actually have an estate.  
  5. Nevada’s statutory period of time that this DAPT can live is 365 years which enable these trusts to provide multi-generational wealth transfer tax efficiently and asset protected. 
  6. Flexibility for the trustor or grantor or creator.  What this means is that even though you created this irrevocable trust you retain a discretionary beneficiary of the trust.  This means that the trust can take care of your expenses and protect you.  Also as the trustor or grantor or creator of the trust, you retain certain powers to control the terms of the trust like directing investments or vetoing distributions or removing and replacing the trust protector.  Therefore, unlike a revocable living trust where you personally retain the power to make changes to a trust, with this DAPT you can hire and fire the person or company that can make changes to the DAPT providing you amazing flexibility and control.

 

What Assets do Clients Frequently Place into a Nevada Domestic Asset Protection Trust DAPT?

Common assets placed into a DAPT are as follows: 

  • Brokerage Accounts (i.e. non-qualified accounts or non-retirement accounts)
  • Bank Accounts (cash, money market accounts, CDs)
  • Real estate (primary residence, rentals, commercial buildings, or land)
  • Businesses – LLC, S Corp, Partnership, Ccorp
  • Life Insurance
  • Patents or any intellectual property and other valuable assets

 

Nevada Domestic Asset Protection Trusts DAPT vs Federal Fraudulent Conveyance Act

The number one rule to have a Domestic Asset Protection Trust (DAPT) work is that it cannot violate the federal fraudulent conveyance act.  In other words, you cannot form, create, and then transfer assets to a DAPT when you are doing so to defraud, delay, or hinder creditors.  In other words, DAPT works when you do it in advance and not with the intent to mess over creditors, but as part of your comprehensive estate planning process.  This is extremely important, and it happens frequently, and the consequence is that not only are all the assets now exposed to creditors, but the case quickly turns from civil liability to civil liability and criminal liability.  

When planning everyone with assets should consider using and incorporating asset protection planning as part of their comprehensive and integrated estate planning.  This is accomplished by following the best trust laws in the nation – Nevada Revised Statutes 166 – to preserve and protect your assets.  

Our Nevada asset protection attorneys have created thousands of DAPTs to protect clients and have spoken nationally on this subject area to attorneys around the nation.  So come learn from the attorneys that teach other attorneys around the nation how to protect assets through Nevada’s amazing protection laws.

Locations

Henderson Office

10424 S. Eastern Ave., Ste. 101
Henderson, NV 89052

Las Vegas Office

9030 W. Cheyenne Ave., Ste. 210
Las Vegas, NV 89129

Pahrump Office

1321 S. Hwy 160, Ste. 8A
Pahrump, NV 89048

Phone

702.465.0888

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