The Bulletproof Vest: Domestic Asset Protection Trusts (DAPT)
The Bulletproof Vest: Domestic Asset Protection Trusts (DAPT)
You don’t need to hide money in the Cayman Islands. Why Nevada and South Dakota have become the “new Switzerland,” allowing you to shield your wealth from lawsuits while still enjoying the money.
Executive Summary
- The Old Rule: Traditionally, if you created a trust and named yourself as a beneficiary (Self-Settled Trust), your creditors could seize the assets. The law said, “If you can spend it, your creditors can take it.”
- The New Rule (DAPT): A few progressive states (Nevada, South Dakota, Delaware, Alaska) changed the game. They passed laws allowing **Self-Settled Spendthrift Trusts**. Even if you are the beneficiary, creditors cannot touch the assets after a specific waiting period (Statute of Limitations).
- The “Charging Order” Shield: If you own assets through a DAPT or a properly structured LLC inside it, a creditor’s only remedy is a “Charging Order”—a lien on distributions that may never come. They cannot force a sale of the assets.
The “Fraudulent Conveyance” Trap
Critical Warning: You cannot set up a DAPT after you get sued or cause a car accident. That is a crime called “Fraudulent Conveyance.”
👉 Timing is Everything: You must build the fortress when the skies are clear. Once the asset is in the trust for 2 years (Nevada/SD), the door slams shut on future creditors forever.
Mechanic: The Legal Firewall
Self-Settled
You are Beneficiary
2 Years
Waiting Period
Nevada
Gold Standard
Exception
Child Support
Simulation: Surgeon vs. Malpractice Suit ($10M Judgment)
Wealth Remaining After Lawsuit
| Feature | Revocable Living Trust | Domestic Asset Protection Trust (DAPT) |
|---|---|---|
| Primary Goal | Avoid Probate | Block Creditors & Lawsuits |
| Control | Total (You are Trustee) | Shared (Independent Trustee required for distributions) |
| Creditor Access | 100% Vulnerable | Blocked (after statute of limitations) |
“Asset protection is not about hiding money; it’s about making your wealth legally unreachable. A DAPT creates a formidable barrier that forces predators to look for easier targets.”
Essential Resources
INTERNAL
BMT Playbooks