What is a domestic asset protection trust?

A domestic asset protection trust (DAPT) is a type of trust that is governed by the laws of the District of Columbia and is designed to help protect a person’s assets from creditors. A DAPT is a trust that is created and funded by a transfer of assets from an individual to a trustee. The trustee then holds these assets for the benefit of the individual and their designated beneficiaries. The goal of a DAPT is to protect the assets from potential creditors. The trust is formed in such a way that the individual retains control over the assets, but the assets are legally held by the trustee. This means that creditors of the individual cannot access the assets or claim them as payment for any debts or judgments. The trust document will list the assets that can be protected and the beneficiaries of the trust. A DAPT is most often used to protect assets that are likely to be targeted by creditors. This includes income, investment accounts, business interests, and real estate. A DAPT can also be used to protect assets that are likely to appreciate in value over time, such as assets held in a retirement account. Overall, a domestic asset protection trust is an important tool that can help protect an individual’s assets from creditors in the District of Columbia. By transferring assets to the trust, an individual can ensure that their assets are not subject to a creditor’s claim. It is important to understand the limits of a DAPT in the District of Columbia, as well as any other relevant laws, before deciding if this type of trust is the best option.

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What is a domestic asset protection trust?

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