Jan 1, 2012 12:00 PM

Legislative developments in domestic asset protection trust states have helped generate interest from a wide variety of clients

By Gideon Rothschild

With 2011 come and gone, we look back at the recent developments in the area of asset protection planning. With fewer clients concerned about estate taxes due to the increased exemption, more advisors are addressing asset protection needs of the modestly wealthy. This specialty niche, once thought to be of interest only to doctors and real estate investors, continues to evolve and attract interest from a wide variety of clients. Much of this interest has been precipitated by the legislative developments in domestic asset protection trust (DAPT) states — now numbering 12. And, at a recent American College of Trust and Estate Counsel meeting, one prominent litigation attorney suggested that it won't be long before an estate-planning attorney is sued for malpractice for not having discussed asset protection strategies with his client.

Though no additional states have passed self-settled trust legislation since Hawaii did so in 2010 (significantly amending its statute to make it more attractive), states continue to race to one-up each other with improvements to existing laws. Nevada, for one, has been very active, passing new charging order legislation for sole member limited liability companies (LLCs). It's also the first state to provide for exclusive charging order limitations with respect to corporate interests, including single shareholders of closely held companies. In addition, Nevada amended its DAPT statute to provide that any trust redomiciled to Nevada will benefit from a tacking on from its original funding date for purposes of determining the two year statute of limitations for fraudulent transfers with respect to DAPTs under Nevada law.

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

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