Understanding Asset Protection Trusts
Asset protection trusts (APTs) are powerful tools for shielding assets from creditors and legal claims. Traditionally, these trusts have been established with restrictions, especially when the grantor (the person who creates the trust) is also a beneficiary. However, recent legal developments have allowed for greater flexibility and protection in certain states.
An asset protection trust is a legal structure that holds and manages a person’s assets to protect them from creditors, lawsuits, and other claims. Unlike typical trusts, an APT is designed specifically to provide legal protection against potential future liabilities.
The Shift Toward Acceptance
Historically, “self-settled” spendthrift trusts—trusts where the grantor is a beneficiary—were often deemed invalid if their primary purpose was to protect the grantor’s assets from creditors. Courts and lawmakers viewed this as against public policy. However, the legal landscape has been evolving.
Today, 17 states have enacted legislation that permits the creation of asset protection trusts where the grantor is also a beneficiary. This shift acknowledges that individuals should be able to protect their wealth, provided the trust is set up under specific conditions. These laws vary widely from state to state, with some offering more comprehensive protections than others.
Independent Trust Company's South Dakota Trust Situs
Take advantage of South Dakota trust law today.
South Dakota is widely recognized for its robust asset protection laws, making it an ideal jurisdiction for establishing asset protection trusts. The state’s legal framework allows for the creation of self-settled trusts, providing a high level of protection against creditors. This is especially beneficial for individuals in high-risk professions or those looking to preserve family wealth for future generations.
Independent Trust Company offers trust situs in South Dakota, granting our clients the advantage of these strong legal protections. By choosing South Dakota, clients can confidently secure their assets while benefiting from the state’s favorable trust laws. Independent Trust Company specializes in helping clients set up and manage asset protection trusts that align with their financial goals and legal requirements.
Whether you’re concerned about protecting your wealth from potential creditors or simply looking to secure your financial future, Independent Trust Company is here to guide you every step of the way.
How Can A Consultant, Co-Trustee or Trustee Help You?
Our solution-focused staff are at your service.
We are experts across the spectrum of personal trust and financial matters. Not only can ITC assume some or all fiduciary duties, our personalized approach helps demystify the technical aspects of managing a trust.
Some of our services include:
- Properly title trust assets
- Research claims made against the trust and oppose improper claims in court
- Engage legal counsel when appropriate and assure legal compliance
- Maintain accurate Principal and Income accounting for all trust assets
- Provide regular account statements
- Pay bills authorized by the trust document
- Develop an Investment Objective aligned with trust documents instructions,
- Establish and Monitor custody of standard investable and unique assets
- Assure prompt, investment of trust assets in compliant products
- Monitor the investment compliance with the trust Investment Objective
- Regularly review portfolios for quality and performance
- Coordinate tax strategies with all stakeholders
- Oversee daily cash management to support day-to-day needs of the trust
- Process distributions of income and principal according to instructions of the trust
*This list is not fully inclusive of all trustee services and is provided only for illustrative purposes. For more detailed information of all services provided by ITC, please call us.