Divorce can bring with it some complicated legal issues, including property division, which can cause major dissension. While prenuptial agreements have been traditionally preferred for resolving property division disputes in the event of a divorce, they still have their limitations.
In situations such as this, Maple Grove residents may wish to explore the idea of creating a Domestic Asset Protection Trust. Some readers may know that a DAPT is an irrevocable trust. Unlike conventional revocable trusts, another person or a third party cannot withdraw funds from the asset or terminate it. That means that the assets that are transferred into the DAPT are protected from creditors and, in this case, separating spouses as well.
Another positive point to remember about a DAPT is that it does not force the creator of the trust to relinquish all ownership of the property in the trust and continues to be a discretionary beneficiary of that trust’s assets. At present, 15 states in the U.S. allow DAPTs. Minnesota is not one of those 15, but residents of the state can create a DAPT in any state that permits DAPTs. The Nevada Asset Protection Trust, for example, is a popular choice among people looking to protect assets in property division.
However, along with its many advantages, a DAPT does have certain limitations. For example, not all assets can be transferred into a DAPT. Typically, the assets that can be transferred include stocks and bonds, cash and some other assets. Again, people may have to make regular trips to other states in order to administer a DAPT. However, in spite of such limitations, a DAPT has some clear advantages, which are hard to ignore and since it is fairly complicated, people who wish to create a DAPT may benefit from an experienced family law attorney’s sound advice.
Source: Forbes, “How to protect yourself in a divorce using domestic asset protection trust“, Robert Pagliarini, May 15, 2014