Asset protection statutes and case law vary significantly from state to state.
- More than ten states have enacted Domestic Asset Protection Trust (DAPT) legislation; but most states have not.
- There is still not a single reported court decision upholding (or striking down) DAPT legislation. Not only can state statutes vary, but in the future, case law in each state could be very different.
- Some states have much better LLC protections than others. State laws are constantly changing. For example, Ohio recently passed legislation that provides significantly better protection for LLC members.
- IRA protection depends to some degree on state law (particularly with respect to inherited IRAs).
- Protection of life insurance from creditors also varies state by state.
The list could go on. Some matters (such as 401(k) plans) are governed by federal law.
Asset protection attorneys therefore need to keep current on various state law developments in order to utilize the best strategies for clients.