Domestic Asset Protection Trust Case Law

This page analyzes the most important court decisions on domestic asset protection trusts.

The Decisions at a Glance

The decisions below come from bankruptcy, divorce, and judgment-enforcement cases, some decided in the trust’s own state and some in the settlor’s home state. Several involve bankruptcy’s ten-year reach-back, which the bankruptcy case law page places beside the other bankruptcy sections that reach a debtor’s property.

Current as of September 2026. Download the DAPT case law chart (PDF).

Case	Trust	What the court did	What happened to the debtor	What happened to the trust assets
In re Huber Bankr. W.D. Wash. 2013, 493 B.R. 798 (Bankr. W.D. Wash. 2013)	Alaska self-settled trust; Washington settlor	Washington law applied; transfers void; avoided under § 548(e)	Chapter 7 discharge entered November 6, 2014	Reached; the estate collected $1,394,459.41, nearly all of it from the two shopping centers DGH, LLC owned
Dahl v. Dahl Utah 2015, 2015 UT 79, 459 P.3d 276	Nevada-law trust; Utah settlor	Nevada choice-of-law clause not enforced; trust held revocable under Utah law	The property distribution was reversed and remanded, with the trust joined to the divorce	Reached; on remand she may revoke the trust as to the marital property she contributed, including the marital home
Netter v. Netter Conn. App. Ct. 2025, 235 Conn. App. 774 (2025)	Three South Dakota self-settled trusts; Connecticut settlor	Trusts held invalid under Connecticut’s act and divisible as marital property	The financial orders were reversed and a new trial ordered on all financial issues	Reached; the three trusts, holding $34,660,977, $2,727,548 and $7,589,211, were divisible marital property, subject to the new trial
Toni 1 Trust v. Wacker Alaska 2018, 413 P.3d 1199 (Alaska 2018)	Alaska trust, assumed without deciding; Montana transferors	Alaska’s exclusive-jurisdiction clause held ineffective against Montana and federal courts	Donald Tangwall was declared a vexatious litigant in April 2017 and his appeals were dismissed as frivolous	Reached; the Montana ranch was sold as a whole, free and clear, under the bankruptcy court’s 2016 order
IMO Daniel Kloiber Dynasty Trust Del. Ch. 2014, 98 A.3d 924 (Del. Ch. 2014)	Delaware dynasty trust settled by the beneficiary’s father; third-party settled, not a DAPT	Exclusive jurisdiction allocates among Delaware’s own courts; restraining order denied	Not stated	Not reached; the court declined to enjoin the Kentucky orders restricting transactions inside the trust
Battley v. Mortensen (In re Mortensen) Bankr. D. Alaska 2011, 2011 WL 5025249 (Bankr. D. Alaska May 26, 2011)	Alaska self-settled trust; Alaska settlor	Transfer avoided under § 548(e); actual intent found	The trustee took his costs against the defendants; attorney’s fees were denied	Reached; the 2005 transfer of the Seldovia property, worth roughly $60,000, was avoided
In re Erskine Bankr. W.D. Tenn. 2016, 550 B.R. 362 (Bankr. W.D. Tenn. 2016)	Tennessee self-settled trust; Tennessee settlor	Trust failed the Tennessee act; the LLC’s business accounts turned over	No discharge; the clerk noticed a Rule 4006 no-discharge on October 24, 2016	Reached; the two business accounts, holding $7,835.53 and $26,566.55, were turned over
Safanda v. Castellano (In re Castellano) Bankr. N.D. Ill. 2014, 514 B.R. 555 (Bankr. N.D. Ill. 2014)	Spendthrift interest under a South Carolina living trust; Illinois debtor; no DAPT statute	Proposed findings for the trustee; the district court entered judgment for the defendants	Judgment entered for her in April 2015; she received no distribution	Not reached; the district court held the interest excluded from the estate under § 541(c)(2)
Rodriguez v. Cyr (In re Cyr) Bankr. W.D. Tex. 2019, 602 B.R. 315 (Bankr. W.D. Tex. 2019)	Irrevocable spendthrift trust created by the debtor’s wife’s parents, with the debtor a beneficiary; Texas, no DAPT statute	§ 548(e) reaches similar devices with no state-law hook; dismissal partly denied	Chapter 7 discharge in March 2021, waived under § 727(a)(10) as to the settlement amount	Reached by settlement rather than judgment; the trust was jointly and severally liable for the $875,000 compromise, reduced to $775,000 and collected in full by August 2021
Quality Meat Products, LLC v. Porco, Inc. (In re Porco, Inc.) Bankr. S.D. Ill. 2011, 447 B.R. 590 (Bankr. S.D. Ill. 2011)	No express trust; a constructive or resulting trust alleged over an Illinois LLC; Illinois has no DAPT statute	Constructive and resulting trusts are not § 548(e) similar devices; count dismissed	Not stated	Not applicable; no express trust, and the § 548(e) count was dismissed while the state-law count went on
Klabacka v. Nelson Nev. 2017, 133 Nev. 164, 394 P.3d 940 (2017)	Two Nevada self-settled spendthrift trusts; Nevada settlors	Trusts upheld; equalization vacated; support awarded against the settlor personally	The $800,000 lump-sum alimony and the child support awards stood against Eric Nelson personally	Not reached; the $8.7 million equalization order was vacated, and neither trust could be ordered to pay his obligations
TrustCo Bank v. Mathews Del. Ch. 2015, C.A. No. 8374-VCP (Del. Ch. Jan. 22, 2015)	Three Delaware trusts; Florida settlor	Claims on the 2007 transfers time-barred; the DAPT statute not reached	She agreed to a stipulated deficiency judgment of about $2.3 million in February 2013	Not reached; those claims were dismissed with prejudice, without prejudice to claims on other transfers
In the Matter of the CES 2007 Trust Del. Ch. 2025, C.A. No. 2023-0925-SEM (May 2 and Oct. 1, 2025)	Delaware self-settled trust; Michigan settlor	Petition dismissed for lack of standing; the magistrate’s finding that the trust met the Act became advisory	The nearly $14 million Michigan judgment stands; a Michigan court voided his January 2020 deed of two LLC-held parcels, affirmed July 2026	Not reached; the 90 percent LLC interests stayed in the trust
In re Cleopatra Cameron Gift Trust S.D. 2019, 2019 S.D. 35, 931 N.W.2d 244 (S.D. 2019)	Spendthrift trusts settled by the beneficiary’s father, situs moved to South Dakota in 2012; third-party settled, not a DAPT	Direct payment held a matter of enforcement governed by forum law; affirmed	Her child support obligation remained intact and in continuing California litigation	Not reached; the trust had paid the support directly from 2009 until January 2017 and could not be compelled to resume
Rush University Medical Center v. Sessions Ill. 2012, 2012 IL 112906, 980 N.E.2d 45 (Ill. 2012)	Trust choosing Cook Islands law; Illinois assets	Self-settled trust held void as to creditors; the common-law rule survived the Act	Sessions died April 25, 2005, leaving an estate found to contain less than $100,000	Reached; the $1.5 million judgment against the trustees on his pledge was affirmed
Menotte v. Brown (In re Brown) 11th Cir. 2002, 303 F.3d 1261 (11th Cir. 2002)	Florida self-settled charitable remainder unitrust; no DAPT statute	Spendthrift clause ineffective; the retained income interest is estate property	Not stated	Partly reached; the 7 percent lifetime income only, not the corpus vested in four charities

Where the table says not stated, the opinions and dockets do not answer the point.

Home-State Law Overrides the Chosen Law

Where the settlor’s home state voids self-settled trusts, its courts apply their own law over the law the trust instrument chose, and the trust property is reached. Courts in Washington (In re Huber, 2013), Utah (Dahl v. Dahl, 2015), and Connecticut (Netter v. Netter, 2025) have each done so.

In re Huber, 493 B.R. 798 (Bankr. W.D. Wash. 2013). Leading case. Under Restatement (Second) of Conflict of Laws § 270, Washington law governed a trust that designated Alaska law. The trust was administered in Alaska, but its only other connections there were one trustee and a $10,000 certificate of deposit. Washington was the state of the settlor, the beneficiaries, the creditors, and the drafting attorney, and its statute has voided transfers to self-settled trusts since 1854. The transfers were void under RCW 19.36.020, and the Chapter 7 trustee won partial summary judgment.

Dahl v. Dahl, 2015 UT 79, 459 P.3d 276. The Utah Supreme Court declined to enforce a Nevada choice-of-law clause in a trust holding marital property, because equitable division of marital property is a strong Utah public policy. Construed under Utah law, the trust was revocable, because the settlor had reserved an unrestricted power to amend, and his wife held an interest in the trust property as a settlor by contribution.

Netter v. Netter, 235 Conn. App. 774 (2025). Three South Dakota self-settled spendthrift trusts a husband created during the marriage with marital assets were divisible marital property under Connecticut law. The trust agreements were not valid instruments under Connecticut’s own act, which requires Connecticut governing law (§ 45a-487k(10)), because they chose South Dakota’s. Even if they qualified, § 45a-487t(a)(3) lets a court decline retroactive application that would substantially prejudice a party. The Connecticut Appellate Court reversed the judgment as to all financial orders and ordered a new trial on all financial issues.

Virginia’s statute draws the same line as Connecticut’s. A qualified self-settled spendthrift trust must expressly incorporate Virginia law to govern its validity, construction, and administration (Va. Code § 64.2-745.2).

Exclusive-Jurisdiction Clauses

When a DAPT statute gives the trust state’s courts exclusive jurisdiction, the clause allocates jurisdiction within that state. It cannot keep a creditor’s suit out of another state’s courts or out of federal court. Alaska’s and Delaware’s courts agree on the point.

Toni 1 Trust v. Wacker, 413 P.3d 1199 (Alaska 2018). Leading case. Alaska’s statute giving its courts exclusive jurisdiction over actions based on a transfer to an Alaska self-settled spendthrift trust cannot deprive another state’s courts of jurisdiction over a transitory action, and fraudulent transfer actions are transitory. A state statute also cannot contract federal jurisdiction, so Montana’s fraudulent transfer judgments against the trust and an Alaska bankruptcy court’s federal judgment both stood; the court assumed without deciding that the Toni 1 Trust was an Alaska trust at all.

IMO Daniel Kloiber Dynasty Trust, 98 A.3d 924 (Del. Ch. 2014). Denying a temporary restraining order, the Court of Chancery held that the “exclusive jurisdiction” Delaware’s statute gives it over qualified-disposition actions (12 Del. C. § 3572(a)) allocates jurisdiction among Delaware’s own courts. “Delaware has not sought through the Qualified Dispositions Act to arrogate exclusive jurisdiction for itself, nor could it.” The Alaska Supreme Court in Toni 1 expressly agreed. The trust was settled by the beneficiary’s father rather than by the beneficiary, but the holding construes the statute itself.

The Ten-Year Bankruptcy Reach-Back

Bankruptcy Code § 548(e) lets a bankruptcy trustee avoid a transfer into a self-settled trust during the ten years preceding the petition, if the debtor was a beneficiary and made it with actual intent to hinder, delay, or defraud creditors.

The section covers a “similar device” as well as a trust. It has been applied without any choice-of-law ruling. The Code’s general fraudulent-transfer provision, § 548(a)(1), reaches back only two years. By comparison, Virginia’s statute gives a settlor’s creditor five years from the transfer to sue (Va. Code § 64.2-745.1(D)).

Battley v. Mortensen (In re Mortensen), Bankr. No. A09-00565-DMD, Adv. No. A09-90036-DMD, 2011 WL 5025249 (Bankr. D. Alaska May 26, 2011). Applying § 548(e)’s ten-year reach-back, the bankruptcy court avoided a debtor’s transfer into his Alaska self-settled trust, finding the actual intent to hinder, delay, or defraud that the section requires. In re Cyr reads the decision as determining that the trust was a self-settled trust under Alaska law.

In re Huber, 493 B.R. 798 (Bankr. W.D. Wash. 2013). Leading case. Having voided the transfers under Washington law, the court also avoided them under § 548(e), finding all five Ninth Circuit badges of fraud present. The bankruptcy trustee was denied summary judgment on alter ego, a doctrine no Washington court had applied to a trust, and on denial of discharge, requiring a trial. Reliance on counsel did not negate intent because the debtor knew their purpose, and an estate-planning motive “is not mutually exclusive of the desire to shield his assets from creditors.”

In re Erskine, 550 B.R. 362 (Bankr. W.D. Tenn. 2016). A trust its settlor called a Tennessee Asset Protection Trust met only the statute’s governing-law requirement, so his LLC’s accounts were estate property. It was revocable (“the power to revoke a trust renders it revocable”), the transferor could not be the qualified trustee, and no qualified affidavit accompanied any transfer. His four children were the named sole beneficiaries, but he kept a present beneficial interest. The LLC had been dissolved in 2012, leaving him a proprietor; the court declined to decide § 548(e) intent.

Safanda v. Castellano (In re Castellano), 514 B.R. 555 (Bankr. N.D. Ill. 2014). After trial the bankruptcy court recommended judgment for the bankruptcy trustee. A spendthrift trust the debtor never signed but caused to be created, by having its trustee invoke the spendthrift clause so her share passed into it, was in the court’s view a self-settled trust or “similar device” under § 548(e)(1)(A). 514 B.R. at 561–62. The district court rejected the recommendation on de novo review: § 541(c)(2) excluded the interest from the estate, and moving the funds between accounts transferred no interest of the debtor, so judgment was entered for the defendants. Safanda v. Castellano, No. 14 CV 07094 (N.D. Ill. Apr. 27, 2015).

Rodriguez v. Cyr (In re Cyr), 602 B.R. 315 (Bankr. W.D. Tex. 2019). Ruling on motions to dismiss, the court held that § 548(e)(1) contains no reference to non-bankruptcy law, so whether transferred assets are “self-settled” under state law does not control. The section reaches trusts and “similar devices,” meaning any device by which a debtor-beneficiary puts assets beyond creditors with actual fraudulent intent. 602 B.R. at 334–35, 340.

The claims never reached judgment. In February 2021 the court approved an $875,000 compromise, reduced to $775,000 if paid within a year (the approval order, DE 282). The agreement made the Bergerud Heritage Trust jointly and severally liable for the payment despite the debtor’s position that its spendthrift clause barred his creditors, and no party admitted liability. The debtor received his Chapter 7 discharge that March, but the court approved his waiver of discharge under § 727(a)(10) for the settlement amount. By that August the estate had collected the full $775,000.

Quality Meat Products, LLC v. Porco, Inc. (In re Porco, Inc.), 447 B.R. 590 (Bankr. S.D. Ill. 2011). The first opinion to construe § 548(e)’s “self-settled trust or similar device” language, an issue of first impression, read the section as Congress’s response to state legislatures overturning the common-law rule against self-settled spendthrift trusts. It noted the House report’s count of five states with such statutes when the section passed: Alaska, Delaware, Nevada, Rhode Island, and Utah. 447 B.R. at 594–96.

Where a DAPT Statute Held

Three decisions, Klabacka v. Nelson, TrustCo Bank v. Mathews, and In the Matter of the CES 2007 Trust, have left a domestic asset protection trust’s property beyond a creditor’s reach. All three came from the courts of the state whose statute created the trust, and none involved a bankruptcy trustee.

Nevada’s statute requires a Nevada trustee, a written irrevocable instrument, no mandatory distributions to the settlor, and no intent to hinder known creditors (NRS 166.015(2)(a) and 166.040(1)(b)). It carries no exception for a child or spousal support obligation that was unknown when the trust was created. Delaware’s act makes the opposite choice and lifts its creditor restrictions for support, alimony, and divorce property division, to the extent of that debt (12 Del. C. § 3573(1)).

Klabacka v. Nelson, 133 Nev. 164, 394 P.3d 940 (2017). Leading case. Two Nevada self-settled spendthrift trusts that met Nevada’s statutory requirements were valid, so the family court could not equalize their assets or order the trustee of the husband’s trust to pay his support obligations; the equalization was vacated. The court expressly rejected the Restatement (Third) of Trusts § 59 support exception, which the Legislature declined in 2013, and the support awards stood against the settlor personally. A nonbeneficiary spouse’s community-property share inside such a trust remains that spouse’s property, outside the spendthrift restraints.

TrustCo Bank v. Mathews, C.A. No. 8374-VCP (Del. Ch. Jan. 22, 2015). A creditor’s fraudulent-transfer claims against a Delaware trust settlor over one set of transfers were time-barred under any state’s law and dismissed with prejudice. Florida had the closest relationship and Delaware the next, both allowing four years or one from discovery, and Delaware’s borrowing statute would have applied even under New York’s longer period. The decision reaches only timing. The court assumed the transfers were fraudulent, left open whether the settlor kept impermissible control, and did not decide whether Delaware’s DAPT statute governed.

In the Matter of the CES 2007 Trust, C.A. No. 2023-0925-SEM (Del. Ch. May 2 and Oct. 1, 2025). A judgment creditor of the settlor petitioned to void a 2007 Delaware trust, or its spendthrift clause, as a sham. The Senior Magistrate’s final report found the trust met the Qualified Dispositions in Trust Act and no basis to void the spendthrift clause. The Vice Chancellor dismissed the petition for lack of standing, the creditor having no injury connected to the trust, and called those merits findings advisory. Both decisions are trial-level.

In re Cleopatra Cameron Gift Trust, 2019 S.D. 35, 931 N.W.2d 244 (S.D. 2019). Settled by the beneficiary’s father, the trust is not a domestic asset protection trust; the case shows a trust state’s court refusing to enforce an outside order against a spendthrift trust. A California order directing the trustee to pay child support straight to the obligee was enforcement, governed by forum law, rather than a judgment owed full faith and credit. South Dakota law lets a spendthrift clause bar such compelled payments, so the trustee could not be ordered to pay.

What the Settlors Who Lost Had in Common

The settlors who lost had funded their trusts with a lawsuit or a failing marriage already in view, had kept control of the property or a benefit from it, or had signed instruments that failed the statute they invoked.

Timing. The Tangwall family moved real property into the Toni 1 Trust in 2010, after Montana courts had begun entering default judgments against them. Netter created his trusts in 2013 and 2015, “as the marriage deteriorated” in the trial court’s words. Huber established his trust in September 2008 with litigation already threatened.

Retained control and benefit. Huber received $14,500 a month in trust income and kept living in his residence, held through an Alaska LLC and leased back to him. Sessions held a protector’s absolute power to appoint or remove trustees and to veto any of their discretionary actions.

Formation defects. Erskine and Dahl turned on the instruments themselves, before any court reached intent. Erskine’s trust was revocable, named him trustee, and had no qualified affidavit behind it. Dahl’s reserved an unrestricted power to amend.

The Common-Law Rule Behind the Statutes

Before any state enacted a DAPT statute, the common law voided a self-settled spendthrift trust as to the settlor’s creditors. The Illinois Supreme Court has held that the state’s fraudulent transfer act did not abrogate that rule.

Rush University Medical Center v. Sessions, 2012 IL 112906, 980 N.E.2d 45 (Ill. 2012). Leading case. The common-law rule voiding self-settled spendthrift trusts survived the Illinois Fraudulent Transfer Act, and the settlor’s reachable interest extends to everything the trustees could have distributed to him, even assets undistributed at death. The $1.5 million judgment against the trustees on his pledge was affirmed. The trust held a 99 percent limited partnership interest (over $16.2 million) and Illinois real estate ($2.7 million) and named Cook Islands law; the opinion records the clause and does not analyze it.

Menotte v. Brown (In re Brown), 303 F.3d 1261 (11th Cir. 2002). Under Florida law, a self-settled trust’s spendthrift clause is ineffective against the settlor’s creditors, even without fraud or insolvency at creation. Creditors reach the interest the settlor retained, a 7 percent lifetime unitrust income, but not the corpus irrevocably vested in charitable remaindermen. Self-settlement and settlor control are independent grounds for invalidating a spendthrift clause.

Whether a domestic asset protection trust protects a non-DAPT-state resident, and how it compares with an offshore trust and with a Cook Islands trust, are planning questions answered on our domestic asset protection trust page and the best states ranking. The offshore trust decisions are collected on the offshore trust case-law page.