For hundreds of years, trusts have had three key players. The settlor is the person who establishes the trust. The trustee is the person responsible for the operation of the trust. And the beneficiary is the person (or persons) who the trust is intended to benefit. Recently, a fourth role — that of the trust
Domestic Asset Protection Trusts
Keep Bankruptcy Code §548(e) in Mind if You Have a DAPT
About 16 states now have laws that allow a Domestic Asset Protection Trust (DAPT). These trusts can be very useful to protect assets in many situations.
But keep in mind that a DAPT (like other asset protection strategies) is designed to protect your assets and keep you out of bankruptcy. It may be less useful…
Two or More APTs May Be Advisable In Some Situations
In Ohio (as in other states that have enacted a Domestic Asset Protection Trust Statute), it may be advisable to have two or more trusts as part of an overall asset protection plan.
For example, a husband and wife may each want to have their own, separate Ohio Legacy Trust. Not only can this help…
Ohio Legacy Trust Not Likely To Affect Your Income Taxes
Clients frequently ask about potential income tax aspects of an Ohio Legacy Trust.
An Ohio Legacy Trust will likely have no effect at all on your income tax situation. The trust will be structured so that it is a grantor trust pursuant to §677 of the Internal Revenue Code. It meets the requirements of this…
Mississippi is Latest State to Enact DAPT Statute
The Mississippi “Qualified Disposition in Trust Act” takes effect today. Mississippi has now become one of about fifteen states that have a domestic asset protection trust statute.
Each of these state statutes is different. But they all offer (with certain exceptions) an opportunity for creditor protection – – as long as appropriate formalities are followed. …
Asset Protection Trust Should Have Provision Allowing Trustee to Change Situs
Earlier this year Ohio joined a number of other states that allow creation of a domestic asset protection trust. In Ohio, it is called an Ohio Legacy Trust.
Ohio law (just like the law of every other state) can change at any time. We currently anticipate no significant change in the new Ohio domestic asset…
Affidavit of Solvency is a Reminder to Plan Before You Have Creditor Problems
Ohio Revised Code §5816.06 requires an affidavit of solvency each time you transfer assets to an Ohio Legacy Trust. This is a fairly standard provision for transfers to Domestic Asset Protection Trusts in other states as well. In Ohio, failure to timely file such an affidavit may be used as a basis for an action…
Trusts Require Flexibility
Asset protection planning (and estate planning) frequently involves the use of one or more trusts. Possibilities include an offshore trust, Domestic Asset Protection Trust, irrevocable life insurance trust and various other kinds of trusts.
Most of these trusts are designed to last for many years. It is therefore important to give the trustee the flexibility to adjust…
Who Needs an Ohio Legacy Trust?
Here are some of the people who should at least consider setting up an Ohio Legacy Trust:
- Business owners
- CEOs and Directors
- People considering marriage
- Others who are willing to part with total control of a portion of their assets
The following chart (prepared by my partner, Paul Fidler) provides some general…
New Laws In Ohio Offer Much Better Asset Protection Alternatives
The Ohio Legacy Trust Act (part of Ohio House Bill 479) becomes effective on March 27, 2013. Ohio will become one of approximately 15 states with what is commonly called a Domestic Asset Protection Trust Statute.
Ohio House Bill 479 also increases the Ohio homestead exemption and makes other changes that offer better asset protection…