What is a Domestic Wyoming Asset Protection Trust?
A Domestic Asset Protection Trust is an attractive option for those individuals who want to protect their assets without having to give their assets away, transfer their assets to a trust of which they are not a beneficiary, or move their assets to a foreign jurisdiction or an offshore asset protection trust.
How Much Does a Domestic Asset Protection Trust Cost?
The base fee for establishing a Wyoming Domestic Asset Protection Trust and a Wyoming Unregulated Single Family Private Trust Company (the Wyoming Wealthcare Trust System), is US$3500.00 and is subject to adjustments dependent upon the complexity of the Trust. OIW Trust Associates LLC welcomes the opportunity to provide a complimentary consultation to discuss any questions you may have regarding establishing a Domestic Asset Protection Trust and to provide a fee quote, based upon the complexity of the planning and objectives of the client.
What are the Requirements for a Domestic Asset Protection Trust?
The basic requirements for creating a Domestic Asset Protection Trust include the following:
- A Wyoming Domestic Asset Protection Trust (Qualified Spendthrift Trust) is established by the client under the laws of the State of Wyoming.
- A Wyoming Unregulated Single Family Private Trust Company is established by the client to serve as the qualified Trustee of the Trust. The client in their home state may serve as Limited Partners (owners) of the Wyoming Unregulated Single Family Private Trust Company.
- The client is not permitted to be a trustee of the Trust.
- The client may be permitted to remove or replace a Trustee of the Trust, after it is created.
- The trust is considered irrevocable and cannot be amended, changed or revoked by the client once it is established.
- Upon establishment of the Trust, the client will name the beneficiaries of the Trust, which may include the client, other family members, friends or charities.
- The Trustee of the Trust is generally given the authority to manage and invest the assets of the Trust and make distributions to the beneficiaries of the Trust, in the Trustee’s sole discretion.
- The client may be permitted to serve as an investment advisor of the Trust. The investment advisor may direct, consent or disapprove of a Trustee’s or Co-Trustee’s action or inaction relating to the investment of trust assets and direct the acquisition, transfer or retention of any trust investment.
- The client may be permitted to veto a distribution from the Trust.
The Wyoming Domestic Asset Protection Trust provides protection for real property, personal property and all gains, appreciation and income generated from the property transferred to the Trust.
At the time of the transfer of the property to the Trust, the client must sign an Affidavit affirming the following:
The client has full right, title and authority to transfer the property to the trust;
The transfer of the property to the trust will not render the client insolvent;
The client does not intend to defraud any creditors by transferring the property to the trust;
The client does not have any pending or threatened court actions against him, except for those court actions identified in the affidavit;
At the time of the transfer of the property to the trust, the client is not in default of a child support obligation by more than thirty (30) days;
The client does not contemplate the filing for relief under the provisions of the federal Bankruptcy Code; and,
The client has and shall maintain personal liability insurance of at least one million dollars ($1,000,000.00) or shall provide coverage equal to the fair market value of the client’s total transfers to the trust, whichever is less. (A personal liability policy in the amount of $1,000,000 typically cost approximately $150 – $300 per year and can be purchased as an umbrella policy).
What Type of Trust Property is Not Protected?
A Wyoming Domestic Asset Protection Trust does not provide protection for the following types of property:
Trust property to be used for the payment of Court ordered child support.
Trust property that is listed upon an application or financial statement used to obtain or maintain credit from a creditor.
Property that has been fraudulently transferred to the Trust pursuant to the Uniform Fraudulent Transfer Act and a claim is made within the statute of limitations.
The trust property may not be protected in a bankruptcy proceeding, if the client transferred the property to the trust with the actual intent to hinder, delay or defraud any entity to which the client was or became, on or after the date that such transfer was made, indebted and the transfer is within the statute of limitations. The Bankruptcy Code creates a ten year statute of limitations for transfers to Domestic Asset Protection Trusts with the actual intent to hinder, delay or defraud any entity to which the client was or became, on or after the date that such transfer was made, indebted and the transfer is within the statute of limitations. Therefore, if the client creates a Domestic Asset Protection Trust, transfers assets to the trust with the actual intent to hinder, delay or defraud a creditor, and the If the client files a bankruptcy petition within 10 years of the transfer, the assets will not be protected from bankruptcy proceedings.