An asset protection trust provides individuals who have a high income or net worth with a way to set aside funds for a rainy day that may not be available to certain categories of future creditors. As a rule of thumb, one should not fund an asset protection trust with more than one-third of one’s assets to avoid appearing abusive. The settlor should be solvent before this trust is funded and the funding cannot result in insolvency or inadequate assets or income to live on for the rest of the settlor’s life outside of a trust.
Delaware asset protection trusts can provide individuals with protections against certain creditor claims after a four year holding period from the time funds are added. A few exceptions include super creditors such as child support, spousal support, tax, and some tort creditors.
We do not provide opinions on asset protection or tax. In certain circumstances where we are entirely comfortable, an attorney from The Williams Law Firm can serve as the qualified Delaware trustee of your trust, with limited powers and duties. Your appointed administrative trustee or advisor trustee and trust protector can have all of the control decisions.
Establishing and maintaining a Delaware Asset Protection Trust should be carefully considered in consultation with your local estate planning, financial planning, and accounting experts. We look forward to providing you with perspective from our experience in Delaware.