What is a domestic self-settled trust?

A domestic self-settled trust is a financial structure and strategy used in asset protection law. It is also called an "asset protection trust" or “DAPT.” This trust is created in a state other than the one in which the settlor (person creating the trust) currently lives, and is generally considered a safe and secure way to protect assets from creditors, lawsuits, and other potential liabilities. Domestic self-settled trusts are especially popular in Indiana because the state has strong asset protection laws. In a domestic self-settled trust, the settlor is able to partially “gift” their own assets to the trust for their own protection. By doing this, they are essentially creating a protective barrier between their assets and any potential creditors. The trust itself then typically has three different roles: a settlor, a trustee, and a beneficiary. The settlor creates the trust and is responsible for making decisions about managing the trust assets. The trustee (usually a third-party professional such as a bank or trust company) is responsible for managing and protecting the fund’s assets. Finally, the beneficiary is the person who will benefit from the trust assets. Domestic self-settled trusts can be incredibly effective in protecting assets in Indiana. However, it is important to ensure that the trust is established correctly and all applicable asset protection laws are followed. Additionally, it is important to choose the right trustee to ensure that the trust is managed appropriately and the settlor’s assets are properly protected.

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What is a domestic self-settled trust?

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