What are self-settled trusts?

Self-settled trusts are a type of trust in which the creator or “settlor” of the trust is also the beneficiary. The trust is established with the settlor’s assets, and they are the ones who receive the benefits of the trust after its formation. In District of Columbia, a self-settled trust may be used to protect the settlor’s assets from creditors, since in many cases the trust itself is treated as a separate legal entity with its own rights and privileges. When designing a self-settled trust, it is important to ensure that the settlor’s interests in the trust are properly separated from those of the beneficiaries, in order to protect the assets from potential creditors. The trust must also be properly administered by a representative, such as a trustee, to ensure that the trust is managed in a way that maximizes the settlor’s protection and preserves the trust’s assets. Self-settled trusts are an important tool in asset protection law, as they allow individuals to protect their assets from creditors in cases where they might otherwise be vulnerable. With the right legal structure and management, these trusts can be a powerful tool to preserve wealth and shield assets from creditors.

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What are self-settled trusts?

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