Prenup or DAPT: Is One Better than the Other?

by Norris Law Group on June 13, 2014

Prenup or DAPT: Is One Better than the Other?Couples commonly set up prenuptial agreements. Now that many couples come into a marriage with assets of their own, it isn’t unusual that spouses may want to ensure that they can “leave with what they came in with” in the event that they divorce. A prenuptial agreement can be tailored to each couples’ needs, and can save a great deal of time, trouble, and money often spent arguing over how assets should be divided in a divorce. While the topic of a prenup can be seen as not being very “romantic” as you prepare for to get married, it can be a very wise conversation to have from a practical standpoint.

But perhaps you and your spouse did not have “the talk” about a prenup prior to getting married and do not have one—and now you are considering divorce. In addition to the “heartbreak” of a divorce, you may be concerned about property division, especially if you don’t have a prenuptial agreement in place. If this is the case, you may have another option available to you in the form of a Domestic Asset Protection Trust, or DAPT. Robert Pagliarini introduces DAPT’s in an article for Forbes magazine.

A DAPT is a “trust with a twist.” It is an irrevocable trust, but it is one that allows the person who creates the trust (the “settlor”) to make him or herself a beneficiary of the trust. While this may seem a little odd, it serves a purpose regarding asset protection. In a traditional irrevocable trust, the trust cannot be changed in any way, but a creditor could potentially come in and make a claim on the assets of the trust and take them as payment for a debt. In a DAPT, creditors cannot do that. Additionally, since the settlor is also a beneficiary of the trust, he or she retains control of the assets and can protect them from creditors while still being able to say how the trust assets are to be managed.

DAPT’s are rather new, and not every state offers them. Utah is one of about 15 states that does offer DAPT’s as an asset protection vehicle. If you are interested in finding out whether a DAPT might be a good choice for you, speak with a skilled attorney familiar with asset protection for Utah residents.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County and throughout Utah in the area of asset protection. Contact them today at 801-932-1238 or online for a free consultation.

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