The DAPT Strategy: Building a “Bulletproof” Legal Vault
Tax Tips / Asset Protection
The DAPT Strategy: Building a “Bulletproof” Legal Vault
💡 Executive Summary
- Problem: Standard Revocable Trusts offer ZERO protection from lawsuits, creditors, or divorce.
- Solution: A Domestic Asset Protection Trust (DAPT) in a friendly state (e.g., NV, SD) legally disconnects you from your assets.
- Result: Even if you are sued and lose, the assets inside the DAPT are unreachable (“Spendthrift” protection for yourself).
⚠️ FRAUDULENT CONVEYANCE
Timing is everything. You cannot set up a DAPT after you get sued or know a lawsuit is coming. Courts will pierce the trust immediately. You must build the fortress when the skies are clear.
Timing is everything. You cannot set up a DAPT after you get sued or know a lawsuit is coming. Courts will pierce the trust immediately. You must build the fortress when the skies are clear.
For business owners and physicians (Tier L2+), wealth is a target. The DAPT changes the legal landscape: it forces creditors to settle for pennies on the dollar because the alternative (piercing a Nevada/South Dakota trust) is nearly impossible.
🧐 Core Definition: “Self-Settled Spendthrift”
Historically, you couldn’t set up a trust for your own benefit and shield it from creditors. DAPT states (like NV, SD, DE, AK) changed the law to allow exactly this. You can be the Beneficiary AND protected.
Historically, you couldn’t set up a trust for your own benefit and shield it from creditors. DAPT states (like NV, SD, DE, AK) changed the law to allow exactly this. You can be the Beneficiary AND protected.
Performance Simulation
Lawsuit Scenario ($10M Judgment)
Personal Name / Revocable Trust
Assets Seized
Bankruptcy
Nevada DAPT Structure
Assets Protected
Settlement Leverage
Top Tier States (The “Big 4”)
| State | Lookback Period | Exception Creditors |
|---|---|---|
| Nevada (NV) | 2 Years (Shortest) | Virtually None |
| South Dakota (SD) | 2 Years | Child Support/Alimony |
| Delaware (DE) | 4 Years | Child Support/Alimony |
“Asset protection is not about hiding money; it is about making it legally unreachable. If a creditor cannot seize it, they must negotiate with you.”
🔗 Related BMT Playbooks (Internal)
🛡️ The Foundation: Dynasty Trusts (Often combined with DAPT) ⚖️ The Vehicle: FLP (First line of defense) ✅ Action Plan: Choosing Between NV vs. SD🏛️ Institutional Resources (External)
📜 State Law: Nevada Spendthrift Trust Act (NRS 166) ⚖️ State Law: South Dakota Qualified Dispositions 🏛️ Bankruptcy Code: § 548 (Fraudulent Transfers)
BMT designs for tax reality, not theory.