What are self-settled trusts?

Self-settled trusts are a type of trust commonly used in asset protection law in Washington. They are designed to shelter assets from creditors, lawsuits, and other potential legal issues. This type of trust enables the creator of the trust (the settlor) to transfer assets into the trust for their own benefit, while protecting those assets from any claims or demands from their creditors. This type of trust prevents creditors from pursuing the assets or receiving any proceeds from their sale. Self-settled trusts include a variety of trust types, such as spending trusts, captive insurance trusts, tenancy-by-the-entirety trusts, and dynasty trusts. Spending trusts are commonly used to protect income-generating assets, such as investments and business assets, while captive insurance trusts are used to protect assets such as real estate. Tenancy-by-the-entirety trusts are used to protect assets such as real estate in the event of a divorce while dynasty trusts are typically used to protect assets such as investments and business assets over multiple generations. The primary benefit of self-settled trusts is their ability to protect a settlor’s assets from creditors, lawsuits, and other legal issues. They can also help to prevent creditors from seizing assets and ensure that the settlor’s assets remain in their control. When used correctly, self-settled trusts can be an effective way to protect one’s assets under asset protection law in Washington.

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What are self-settled trusts?

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