Utah Domestic
Asset Protection Trust
A Utah Domestic Asset Protection Trust (UDAPT), often referred to as a DAPT, is a powerful tool for safeguarding your assets. Utah law explicitly provides a high level of creditor protection for a DAPT, provided the trust is set up correctly and meets all the state requirements.
Below are some of the benefits of a Utah Domestic Asset Protection Trust
Irrevocability
Once you put your assets into this trust, you generally can’t change your mind and take them back out whenever you want. This irrevocability is different from a “revocable trust”, where you have more flexibility. That said, there are some things that can remain amendable even in an irrevocable trust. At Morgan Law, we often build in flexibility such as the power to change who gets the trust assets when the creator passes away.
Waiting Period
There’s typically a waiting period after you place your assets into the trust before they’re protected from creditors. So, you can’t just quickly move your assets into the trust right before you think you’re going to get sued and expect them to be shielded immediately.
Control
Even though the assets are in the trust, you can still have some control over them. You can be a beneficiary and benefit from the assets, you can even control how assets are used within the trust as a co-trustee, but you wouldn’t have complete control. Instead, a third-party trustee (which can be another person or a bank) has authority to make withdrawals from the trust on your behalf. This third-party would serve as a distribution trustee.
Solvency Affidavit
When an individual creates a Utah Domestic Asset Protection Trust, they must sign a sworn statement certifying among other things they actually own the assets being transferred to the trust, that the transfer to the trust will not render the trust creator insolvent, meaning unable to pay their debts, also that the trust isn’t being created to defraud a creditor, and that the creator is not behind on a domestic obligation such as alimony or child support.
Legitimate Planning
It’s essential to understand that this kind of trust isn’t a way to fraudulently hide assets or evade legitimate debts. It’s designed for legitimate planning and asset protection purposes.
Specific Statutes
The Utah Asset Protection Trust is governed by specific statutes, ensuring assets within the trust are safe from certain creditors. A key provision, Utah Code § 25-6-502 (3), stipulates that if an irrevocable trust’s creator is also its beneficiary, a creditor can’t claim an interest in assets under the trust’s name or force distributions, given certain conditions are met.
Choose Morgan Law
Specialized Knowledge
Here at Morgan Law, we have specialized knowledge in Utah Estate Law and have extensive experience in setting up UDAPTs. We understand the nuances of the Utah laws governing UDAPTs, and can ensure that your trust is set up in compliance with all relevant laws and regulations.
Trustee Selection Guidance
In a UDAPT, you cannot serve as the sole trustee over your own trust, although you can serve as a co-trustee. Our attorneys can provide guidance on selecting a suitable co-trustee. This co-trustee could be a child, sibling, or other family member but not your spouse.
Ongoing Support
Here at Morgan Law, we provide ongoing support to our clients. We can help you understand how to manage your UDAPT and can provide advice on issues that may arise in the future.
Trustee Maintenence
A UDAPT requires regular maintenance to remain effective. We can assist with this maintenance, ensuring that your trust continues to provide robust asset protection.
Customized Trusts
We tailor each trust to the specific needs of our client. Trusts are all we do. Literally, we don’t have hobbies, talents or other skills. We know trusts. We take into account your unique circumstances and goals to create a trust that provides the maximum possible protection for your assets.
Asset Transfer Assistance
Transferring assets into a UDAPT involves certain legal requirements. For example, you must sign an affidavit at the creation of the trust certifying, among other things, that the transfer of the assets to the trust will not render you insolvent. We can guide you through this process to ensure that all of the legal requirements are met.
Risk Assessment
Our attorneys will help assess your risk profile and advise on whether a UDAPT is the right choice for you. The reality is that the UDAPT simply isn’t a good fit for everyone. In cases where the UDAPT isn’t the best option, we can suggest other asset protection strategies that might be more suitable for your situation.
Peace Of Mind
Perhaps the most important reason to choose Morgan Law is the peace of mind that comes from knowing your UDAPT has been set up correctly, in accordance with all relevant laws and regulations. You can rest easy knowing that your assets are protected and that you have a team of professionals ready to assist you with any questions or issues that may arise.
In Conclusion
In conclusion, setting up a UDAPT is a complex process that requires specialized knowledge and experience. Morgan Law has both, making us an excellent choice for anyone considering this type of trust. Whether you’re a professional in a high-risk field, a business owner, or simply someone who wants to protect their assets for the future, Morgan Law can provide the guidance and support you need to set up a UDAPT.
