Is a DAPT revocable?

A Domestic Asset Protection Trust (DAPT) is typically an irrevocable trust, which, in general, means that once the trust is established and assets are transferred into the trust, the grantor has absolutely no capacity to alter or revoke the trust. This feature is key to accomplishing what was intended-asset protection-since that places the assets beyond the direct reach of the grantor. Of course, there might be certain flexible provisions inserted in the agreement of the trust, which can allow some amendment on given conditions, sometimes with the consent of a trustee or protector.

Although a DAPT provides many different asset protection benefits, one needs to understand that the shielding level and other rules for such trusts can vary from state to state. In typical circumstances, such a trust is designed in such a way that the grantor has continued access to the assets but, at the same time, does not risk those same assets becoming liable to his or her creditors or other litigants under most legal principles.

Establishing a DAPT requires knowledge of the legal framework of the jurisdiction in which the trust is set up, since not all states accord equal protection to the assets. Also, different jurisdictions may or may not recognize DAPTs, which could affect their efficacy in that instance.

It would not be unwise to consult an informed attorney about what specifically the establishment of a DAPT will look like, including its irrevocability and what can be inferred beneath the laws of a state. One Pacific Trust offers expert guidance to help clients navigate the complexities of establishing and managing DAPTs effectively.