Domestic Asset Protection Trust Attorney
A Domestic Asset Protection Trust is a particular class of trust that is established for the sole purpose of protecting assets from creditors and/or civil judgements. It is structured basically the same as other trusts, in that a grantor establishes and funds the trust with assets for certain named beneficiaries, and names trustee to manage the trust assets, all under the charter of the trust.
As any asset protection attorney can explain, as with all types of trusts, the assets placed within the trust cannot be taxed, used in the calculation of the grantor’s estate or harmed by creditors or lawsuits. The assets are not owned by the grantor any longer; they are considered to be “owned” by the trust itself. The trustee is the only person with control over the assets, and his or her duties and limits are spelled out in the trust.
The difference in a domestic asset protection trust arises in that it is a “self-settled” trust, meaning that the grantor can also name him or herself as a beneficiary of the trust. The trustee still exercises control over the distribution of the trust’s assets, but the grantor who funded the trust also enjoys the benefits of the assets as a beneficiary.
All trusts are governed by state laws, and several states allow domestic asset protection trusts, and have even passed laws that encourage grantors to establish domestic asset protection trusts in their state to encourage investment. This type of trust, known as a DAPT, is a popular form of asset protection trust that allows a grantor to have his or her cake and eat it, too.
Florida Law and Domestic Asset Protection Trusts
The State of Florida does not protect a grantor’s assets from seizure if he or she is also named as a beneficiary in the trust. Florida law and a number of court challenges have established that creditors and those seeking judgements against a grantor have full access to the beneficial interest in the income or principal from a DAPT “self-settled” trust where the grantor is also named as a beneficiary.
Tampa asset protection attorney Michelangelo Mortellaro can recommend better tools to protect your assets in Florida, including other types of trusts. In many cases, irrevocable trusts can be an effective tool in your asset protection strategy. Mortellaro Law can advise you on a variety of asset protection methods for all sizes of estates and entities that provide better legal protections and benefits.
It is not illegal for a Florida resident to own and benefit from a DAPT, in Florida or in another state. In fact, if a Florida resident establishes a DAPT in a DAPT-friendly state, the more of the trust’s assets, beneficiaries and trustees are situated in that state, the higher the likelihood that that DAPT-friendly state’s laws will apply to the trust. In other words, the Florida resident who established the trust as grantor may enjoy that state’s protections from creditors and others.
Conversely, if more the trusts assets and parties are situated in Florida, the more likely it is that Florida courts will apply Florida laws to the trust and its assets. This is not an established rule, but simply an observation based on records of Florida court judgments. Asset protection attorney Michelangelo Mortellaro can provide more information and legal counsel in a private consultation at his Tampa office.
Beware of False Asset Protection Trusts in Florida
Florida law makes it extremely difficult to protect the assets placed in self-settled trusts from civil creditors. Any self-settled trust that allows the grantor to also be a beneficiary of the trust cannot guarantee asset protection in Florida, regardless of the claims made by some asset protection law firms.
Special names or “trademarks” applied to self-settled trusts have no bearing on, or add no protections to, the said trust under Florida law. Do not allow yourself to be fooled. Consult with a knowledgeable, ethical and experienced asset protection attorney from Mortellaro Law in Tampa when considering the feasibility of a trust for asset protection.
Trusts can be used in Florida for asset protection purposes. In particular, an irrevocable trust that names your children or other people or entities as beneficiaries is a superb method of asset protection. But remember, in general, for a trust to truly protect your assets, you must surrender all control of and benefit from the trust assets.
Remember, asset protection attorney Michelangelo Mortellaro always recommends that asset protection measures, such as trusts, should be enacted before your assets come into question in any legal setting. That means the time to establish asset protection is now. Call our Tampa office at (813) 291-0734, or simply initiate a chat on this page to obtain more information or schedule a consultation.