What Are Domestic Asset Protection Trusts (DAPTs)?
In the United States, Domestic Asset Protection Trusts (DAPTs) offer a legal mechanism to protect wealth from lawsuits, creditors, and divorce proceedings. While less robust than offshore trusts, DAPTs remain a preferred tool for high-income professionals, doctors, and business owners.
How Are They Different from Offshore Trusts?
DAPTs are created under U.S. state laws—Nevada, Alaska, and South Dakota being the most popular jurisdictions. These states offer statutory protection allowing individuals to serve as both grantor and beneficiary under certain rules.
For global-level asset shielding, Offshore Trusts still provide broader legal insulation, but for domestic concerns, DAPTs are more accessible and affordable.
Limitations of DAPTs
- Subject to U.S. court jurisdiction
- Less anonymity compared to offshore trusts
- Limited enforceability in non-DAPT states
Is a DAPT Right for You?
If your primary concern is protection from future creditors or litigation within the U.S., DAPTs can be extremely effective—especially when combined with other tools like LLCs and retirement account structures.
For executives and medical professionals concerned about rising litigation, pairing a DAPT with high-limit Identity Theft Insurance ensures both personal and financial coverage.
Further Resources
Interested in broader estate strategies? Explore how Asset Protection Trusts complement 401(k) plans and Capital Gains Tax Planning.