The Utah Domestic Asset Protection Trust (UDAPT) statute is among the most effective asset protection trust statutes in the country. The statute states that you can fund and create an irrevocable asset protection trust using your own assets, as well as be both the trust’s co-trustee and beneficiary. Considering that you meet all the law’s requirements, prospective creditors can’t access your trust assets.
What Exactly is the Utah Domestic Asset Protection Trust Statute?
- The UDAPT law lets you make a trust especially for you and your family, and use some of your assets as funding. This means that assets included in your UDAPT are protected against future creditors. You’ll be the trust’s beneficiary while you’re living, and your trust can still take effect for your children and their children upon your death.
- The amount of assets you want to put in your trust is entirely up to you. Christensen Young & Associates and other asset protection attorneys in Utah recommend that you must think carefully prior to putting the majority of your assets in the trust. This is because you won’t be able to withdraw them, as your co-trustee is the only one who can make decisions about distribution. Likewise, you won’t be capable of transferring any assets to your trust if it will result in insolvency or bankruptcy.
- You could likewise be a co-trustee and invest and manage your trust, provided that you won’t participate in decisions regarding distribution. A co-trustee can also be a member of your family or close and trusted advisor or friend. You could likewise be a beneficiary. Any distributions coming from your trust, however, must be made in the discretion of the trustee. If you want to act as a trustee, only your co-trustee can make decisions about distribution. Additionally, at least one of your trustees must be a resident in Utah.
A UDAPT could be a valuable estate planning tool for safeguarding your assets from involuntary or prospective creditors. You can’t use it as a means to deceive existing creditors (if you have any), though. Whether a UDAPT is ideal for you depends on your personal circumstances, and only an experienced asset protection lawyer can help you determine if it’s the right choice.