Overview
A DAPT is a self-settled irrevocable trust where the grantor is also a beneficiary. Certain states (Nevada, South Dakota, Delaware, and others) permit DAPTs, allowing you to transfer assets, protect them from future creditors, and still receive discretionary distributions. The grantor is both creator and potential beneficiary.
Best For
- Professionals with high lawsuit exposure (doctors, lawyers)
- Business owners wanting personal asset protection
- Real estate developers and investors
- Anyone wanting asset protection while retaining access
Key Features
- ✓ Grantor can be a discretionary beneficiary
- ✓ Protection from future creditors after statute of limitations
- ✓ Must use a trustee in a DAPT-friendly state
- ✓ Discretionary distributions for health, education, support
- ✓ Strongest domestic asset protection available
- ✓ Trust Protector provisions for flexibility
📊 Tax Benefits
- ✓ Assets removed from taxable estate
- ✓ Can be structured as grantor trust
- ✓ Future appreciation excluded from estate
- ✓ Gift tax exemption strategies available
- ✓ State income tax benefits in no-tax DAPT states
Considerations
- Only available in certain states (NV, SD, DE, and others)
- Must use a trustee in the DAPT state
- Statute of limitations varies by state (2-4 years)
- Will not protect against existing creditors
- Bankruptcy courts may not honor DAPT protection
- Must be established before any creditor issues arise