What Is An Asset Protection Trust?

by Bruce Givner on October 17, 2011

An asset protection trust is a trust that you set up, with your own assets, of which you are the beneficiary, which is protected from your own creditors. An asset protection trust is something you cannot do under California law, or under the laws of 36 of the other states. California and those other states have a rule against what are called “self-settled spendthrift trusts.” The origin of that rule is medieval England, hundreds of years ago, when it was felt to be unfair that you could transfer your assets to an asset protection trust to benefit yourself and yet shield them from your own creditors.

Back in the 1960s certain countries started repealing that rule. Those countries included islands off the coast of England – the Isle of Man, Jersey and Guernsey – a number of countries in the Caribbean, including the Cayman Islands, and – in the South Pacific – the Cook Islands. So people from the United States and other countries started setting up asset protection trusts in those favorable trust jurisdictions. Then, starting in 1988, Alaska, followed by Nevada and Delaware, adopted favorable domestic asset protection legislation to capture some of that business from U.S. citizens. We will talk more about the domestic asset protection trust in a future blog. www.GivnerKaye.com (310) 207-8008

{ 3 comments… read them below or add one }

gok-kasten October 25, 2011 at 9:08 am

Awesome blog, it’s just like a game for me! It’s so infomative and usefull, thanks a lot! If you post more of this great stuff, I’ll visit your blog again!

Reply

Janaye October 29, 2011 at 9:00 pm

Thanks for the insight. It brings light into the dark!

Reply

admin October 30, 2011 at 12:13 pm

Our pleasure. Do you have an asset protection trust?

Reply

Leave a Comment

Previous post:

Next post: