Domestic asset protection, built to your budget.

Since 1992, Tresp, Day & Associates has provided clients in San Diego, California, and across the United States with domestic asset protection legal services. Our attorneys have extensive experience preparing Domestic Security Trusts (DST), Master Protection Trusts (MPT), and Domestic Asset Protection Trusts (DAPT) for a variety of clients. Although an offshore trust is considered the strongest legal asset protection option, domestic asset protection trusts can provide adequate protection. Our domestic asset protection lawyers can assess and guide you through the legal options that fit your unique needs.

Domestic Security Trust (DST)

A DST is an irrevocable trust formed in the United States for basic asset protection, estate planning, estate tax, and tax considerations. Similar to other irrevocable asset protection trusts, the main purpose of a DST is to remove ownership over your assets. As the saying goes, “whoever owns asset A can lose asset A.” A Domestic Security Trust removes asset ownership by creating a legally recognized “ultimate owner”, the trust owns the assets, and no individual or entity owns the trust.

A Domestic Security Trust stands alone and cannot have a judgment passed against it, protecting your estate from personal creditors. The only way a creditor can access a DST is by claiming fraudulent conveyance. We strongly recommend establishing a DST long before a creditor comes after your assets, like establishing flood insurance before a flood; buying it after the fact does nothing at all. Often an additional entity such as an LLC, FLP, or Corporation is created in conjunction with a DST, enabling complete control of all assets transferred into the trust while rendering them lawsuit-proof. DSTs are also ideal for clients ready to begin gifting to a future generation, with more control, asset protection, and estate-tax planning than outright gifts.

Master Protection Trust (MPT)

Similar to a Domestic Security Trust, a Master Protection Trust is ideal for individuals seeking protection similar to an Offshore Asset Protection Trust but working with a limited budget. Its distinction is that an MPT can decant to an offshore jurisdiction at a later date, established in the United States now and later transferred to an offshore jurisdiction favorable to asset protection trusts, such as the Isle of Man, Gibraltar, Nevis, or the Cook Islands.

Domestic Asset Protection Trust (DAPT)

A Domestic Asset Protection Trust allows you to be the Primary Beneficiary of a self-settled trust during your lifetime. It is the only type of domestic irrevocable trust that allows this and is modeled after the Offshore Asset Protection Trust. Although DAPTs are modeled after the offshore version, they cannot carry the same level of protection because they remain under the jurisdiction of the United States courts.

DAPTs are fairly new and are now available in 17 states: Nevada, Alaska, Delaware, Hawaii, Michigan, Mississippi, Missouri, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

What is the best state to establish a DAPT?

The experts at Tresp, Day & Associates favor the state of Nevada when establishing a Domestic Asset Protection Trust. Nevada has traditionally supported business owners’ rights to privacy and provided legal protection for their business entities. Nevada’s courts have experience with DAPTs and a predisposition to accepting these rights while other states don’t. Nevada also has a two-year statute of limitations for fraudulent conveyance, compared to the standard four-year statute.

DAPT statute of limitations

There is a two-year statute of limitations for fraudulent conveyance on any Domestic Asset Protection Trust established in Nevada, giving any creditor a very limited amount of time to file a claim. However, this advantage goes out the window if you already have a claim against your assets when you establish your DAPT, reinforcing why it’s important to have an asset protection strategy in place long before any creditors come along. Once a DAPT is established, a creditor must file a fraudulent conveyance claim within the two-year timeframe, or they miss their chance for good.

DAPT Settlor/Beneficiary structure

Domestic Asset Protection Trusts allow you, the Settlor, to also be the Primary Beneficiary, a characteristic that differentiates DAPTs from other “lawsuit-proof” trusts in the United States. Distributions to the Settlor/Beneficiary are made by a Special Trustee, maintaining the integrity of the irrevocable trust. All assets can still be legally controlled through underlying entities.

Decanting provision

Decanting provisions allow the future transfer of a Domestic Asset Protection Trust to an offshore jurisdiction, giving you an opportunity to strengthen your trust even further when the time is appropriate for you.

We know that figuring out the best protection for your estate can be overwhelming and confusing. Our attorneys are here to help you through this important decision-making process. To receive more in-depth information, call our office to schedule a consultation at (858) 755-6672.