Which States Offer Domestic Asset Protection Trusts?

Domestic Asset Protection Trusts (DAPTs) are a form of trust designed to help individuals protect their assets from creditors. Not all states in the U.S. allow for the creation of DAPTs. The states that offer Domestic Asset Protection Trusts have specific statutes that permit these kinds of trusts, often with varying degrees of protection and differing requirements. Here’s a list of states that are known for offering domestic asset protection trusts:

1. Alaska
2. Delaware
3. Nevada
4. South Dakota
5. Wyoming
6. Rhode Island
7. Utah
8. New Hampshire
9. Ohio
10. Missouri
11. Tennessee
12. Mississippi
13. Oklahoma
14. Virginia
15. West Virginia
16. Hawaii
17. Michigan
18. South Carolina

The laws and effectiveness of DAPTs can vary significantly from state to state. Some states offer stronger asset protection features than others. The choice of state for establishing a DAPT can depend on several factors, including the specific asset protection laws in that state, the residency of the settlor (the person who creates the trust), and the type of assets being protected.

Do Domestic Asset Protection Trusts Work Well in Florida?

Regarding trusts, Florida law does not provide the same level of asset protection as states with specific DAPT statutes, such as Nevada, Alaska, or Delaware.

Instead, individuals in Florida often use other asset protection strategies. For instance, they might use statutory exemptions and establish entities like limited liability companies or limited partnerships for business assets. Forming a domestic asset protection trust in another state does not usually work well because Florida courts usually apply Florida collection law against a Florida resident’s interest in an out-of-state trust.