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Gonnella & Majors, PC

Establish a Domestic Asset Protection Trust in the State of Wyoming

    What is a Domestic Asset Protection Trust?

    A Domestic Asset Protection Trust, formally known as a qualified spendthrift trust, is
    designed to allow you to create a Trust of which you may be a beneficiary, transfer a
    portion of your assets to the trust, and provide for certain creditor protection and asset
    protection for the assets transferred to the trust.

    Traditionally, these types of trusts were not permitted in the United States and
    individuals would have to establish an offshore asset protection trust to provide for
    creditor and asset protection.  Effective as of July 1, 2007, the Wyoming Legislature
    enacted legislation permitting individuals to establish domestic asset protection trusts in
    Wyoming, formally known as "Qualified Spendthrift Trusts," which can provide certain
    protection from creditors, liabilities and judgements.  Our office assist clients
    throughout the country with the establishment of domestic asset protection trusts in the
    State of Wyoming.

    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 fee for establishing a Wyoming Domestic Asset Protection trust is dependant upon
    the complexity of the Trust. The cost for establishing a basic Wyoming Domestic Asset
    Protection Trust can be as low as $2,500.00, but the fees may be higher based upon
    the complexity of the trust and the client's needs.    

    Our attorneys are available for 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 are as follows:

  1. A Wyoming Domestic Asset Protection Trust (Qualified Spendthrift Trust) is
    established by the client under the laws of the State of Wyoming.
  2. The client appoints at least one qualified trustee to serve as Trustee of the
    Trust.  
  3. The qualified trustee must either be a resident of the State of Wyoming, or a
    person or institution authorized by the State of Wyoming to act as a Trustee.
  4. The attorneys in our law firm often serve as Trustees for the Wyoming Domestic
    Asset Protection Trusts we establish for our clients.  
  5. The client is not permitted to be a trustee of the Trust.
  6. The client may be permitted to remove or replace a Trustee of the Trust, after it
    is created.
  7. The trust is considered irrevocable and cannot be amended, changed or
    revoked by the client once it is established.
  8. 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.
  9. 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.
  10. 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.
  11. The client may be permitted to veto a distribution from the Trust.

    What Type of Trust Property is Protected?

    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 $200 -
    $400 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.

    Are there any Concerns or Risks Associated with Domestic Asset Protection
    Trusts?

    Alaska enacted the nation's first self-settled spendthrift trust legislation, commonly
    known as the Domestic Asset Protection Trust in 1997.  Other states thereafter
    followed suit, and as of January 1, 1009, ten states have enacted similar Domestic
    Asset Protection Trust Legislation.  These states include, Alaska, Delaware, Missouri,
    New Hampshire, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, and
    Wyoming.  Since Domestic Asset Protection Trust legislation is relatively new,  
    commentators have expressed concern over the effectiveness of Domestic Asset
    Protection Trusts and whether the assets held by the Trust will be adequately
    protected.  Some of the concerns addressed by commentators are as follows:

  1. Conflict of Laws. There is a question as to whether the law in the state of
    Wyoming (or in another Domestic Asset Protection Trust state) will be
    enforceable or followed in an out of state court that has not enacted Domestic
    Asset Protection Trust Legislation. The concern is that the out of state Court
    may not recognize the law of the state of Wyoming or the Domestic Asset
    Protection Trust Jurisdiction and refuse to extend the asset protection to the
    Domestic Asset Protection Trust.  Since Domestic Asset Protection Trusts are a
    relatively new, there is little case precedent as to how a Court may decide this
    issue.  In order to mitigate this potential issue, it is generally recommended that
    the Domestic Asset Protection Trust be established in the state where the client
    is a resident.  In the event that the client is the resident of a state that has not
    enacted Domestic Asset Protection Trust legislation, it is recommended that the
    assets transferred to a Domestic Asset Protection Trust be held in the state of
    Wyoming through a bank or other like depository, or that the assets be held
    within a Wyoming business entity.  Wyoming Statute Section 4-10-522 also
    provides that if an out of State Court declines to apply Wyoming Law to the
    Domestic Asset Protection Trust, the Trustee may resign as Trustee.
  2. Full Faith and Credit Clause.  The Full Faith and Credit Clause of the U.S.
    Constitution provides that each state has to give full faith and credit to the laws
    of another state.  There is a concern that if an out of state court decides not to
    recognize the protection of a Domestic Asset Protection Trust and enters a
    judgement in favor of the creditor, the creditor may be able to enforce the
    judgement against the Trustee of the Domestic Asset Protection Trust, even
    though the Trustee is located in the state of Wyoming.  This issue has not yet
    been addressed by the Courts, but a Domestic Asset Protection Trust
    Jurisdiction may decide not to enforce the Judgement.      
  3. Bankruptcy.  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.

    Please contact our office to schedule a free consultation to learn more about Domestic
    Asset Protection Trusts and to determine whether a Domestic Asset Protection trust
    may be appropriate for your situation.
GONNELLA & MAJORS, PC
Attorneys and Counselors at Law

LEARN MORE ABOUT THE
SERVICES WE OFFER

ESTATE PLANNING

  • Revocable Living Trust
  • Last Will & Testament
  • Financial Power of Attorney
  • Health Care Power of Attorney
  • Living Will
  • Personal Property
    Memorandum
  • Health Insurance Portability
    And Accountability Act Form

ADVANCED ESTATE PLANNING
STRATEGIES

  • Qualified Personal Residence
    Trust (QPRT)
  • Wyoming Dynasty Trust
  • Domestic Asset Protection
    Trust (DAPT)
  • Irrevocable Life Insurance
    Trust (ILIT)
  • Intentionally Defective Grantor
    Trust (IDGT)
  • Family Limited Partnership
    (FLP)
  • Close Limited Liability
    Company (LLC)
  • Private Foundation
  • Charitable Remainder Trust
    (CRT)
  • Charitable Lead Trust (CLT)
  • Gifting Trust
  • Stand Alone Retirement Trust
  • Build Up Equity Retirement
    Trust (BERT)
  • Private Trust Company
  • Family Office

ASSET PROTECTION

  • Domestic Asset Protection
    Trust
  • Offshore Asset Protection  
    Trust
  • Wyoming Close LLC
  • Incorporation
  • Spendthrift Trust for Children
  • Failed Marriage Protection
  • Creditor Protection
  • Estate Tax Protection
  • Prenuptial Agreement

INCORPORATION SERVICES

  • Wyoming LLC
  • Wyoming Close LLC
  • Wyoming Flexible LLC
  • Corporation
  • Close Corproation
  • C Corporation
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  • Nonprofit Corporation
  • Partnership
  • Limited Partnership
  • Family Limited Partnership
    (FLP)
  • Nonprofit Corporation
  • Tax Exempt Organization
  • 501(c)(3)
  • Registration of Business in
    Wyoming
  • Moving the Jurisdiction of
    Business to Wyoming

BUSINESS SERVICES

  • Securities
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  • Annual Meeting Minutes
  • Buy Sell Agreements
  • Business Succession Plans
  • Tax Planning
  • Trademark
  • Tradename
  • Business License
  • Regulatory Requirements
  • Tax ID Number

TRUST AND PROBATE
ADMINISTRATION

  • Probate Administration
  • Ancillary Probate
    Administration
  • Affidavit of Survivorship
  • Affidavit of Distribution
  • Estate Tax Return
  • Probate Litigation
  • Tax Controversy
Gonnella & Majors, PC ▪ 575 South Willow Street ▪ P.O. Box 1226 ▪ Jackson, WY ▪ 83001
Phone (307) 733-5890 ▪ Facsimile (307) 734-0544 ▪ www.wyomingestatelaw.com


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Gonnella & Majors, PC
575 South Willow St.
P.O. Box 1226
Jackson, WY 83001
(307) 733-5890
(307) 734-0544
www.wyomingestatelaw.com


Wyoming Domestic Asset  
Protection Trust
Asset Protection Planning

Asset Protection Planning

    Asset protection can be found in many different forms, including insurance, business
    entities, retirement accounts, homestead exemptions, and asset protection trusts.  
    These varying types of asset protection may be suitable for some individuals, while not
    suitable for others.  Gonnella & Majors, PC can help identify and implement those asset
    protection strategies that may be suitable for the client.

    The attorneys at Gonnella & Majors, PC have extensive experience in advising clients
    and businesses on the most appropriate way to structure and hold their assets in order
    to provide the best asset protection available.  Each of our attorneys have extensive
    experience in drafting and creating asset protection trusts, irrevocable trusts, dynasty
    trusts, limited liability companies, corporations, partnerships and other business entities
    and asset protection vehicles.

    Incorporate in Wyoming

    Creditor protection is one of the main reasons clients create business entities.  Many
    state statutes only give nominal creditor protection for their business entities; however
    Wyoming has favorable creditor protection legislation.  By way of example, the
    Wyoming Close LLC gives maximum protection as it mandates by statute that a creditor
    of a member of an LLC only has the rights of a transferee and that the charging order
    is the exclusive remedy by which a judgment creditor may satisfy a judgment, Wyoming
    Statute Section 17-15-145.  This statute enhances creditor protection over most other
    states for LLC's.   

    Gonnella & Majors, PC consults on a daily basis with clients desiring to take advantage
    of the Limited Liability Protection afforded through the establishment of Limited Liability
    Companies and Corporations in the State of Wyoming.

Create a Domestic Asset
Protection Trust

Let the attorneys at Gonnella &
Majors, PC advise and assist you in
the formation of a Domestic Asset
Protection Trust.    

Contact our office to schedule a free
initial consultation with one of our
attorneys to learn more about
establishing a Domestic Asset
Protection Trust.