Cottonwood Heights Asset Protection Attorneys | Serving Salt Lake City
High net worth individuals in Utah have worked hard to build a comfortable life for themselves and their families. Many of these individuals seek to pass their homes, vehicles, savings, and other assets down to their loved ones as part of their estate plan. Those who are diligent will look to protect their assets as much as they possibly can, but what happens if you get sued and these assets are put at risk? It is important to be aware of how the law and various estate planning options can be used to protect the assets of your estate.
If you are in need of a Salt Lake City asset protection lawyer, contact John Park Law in Cottonwood Heights today at (801) 701-3330 or fill out a contact form.
About Utah’s Domestic Asset Protection Trust Statute
In 2013, Utah’s state legislature passed the Domestic Asset Protection Trust Statute, which offers protection for personal and business assets for Utah residents. Before the passing of this law, there was little that Utahns could do to protect their assets from litigation and creditors. The UDAPT offers the following asset protection trust laws:
- Individuals can fund a trust with any type of assets they wish to protect.
- The estate owner maintains total control over the assets in the trust.
- Estate owners can name themselves, their spouse, and their family members as beneficiaries of the trust who will receive the assets in the future.
- The estate owner can name a trusted friend, family member, or advisor as a co-trustee.
- The trust must have at least one Utah trustee and must hold some Utah assets, but can also include assets in other states.
- The estate owner must sign an affidavit stating that they are still solvent after contributing any assets to the trust.
Benefits of Placing Assets in a DAPT Trust
The Utah DAPT is a type of irrevocable trust that offers unique protections not found in revocable trusts or other types of irrevocable trusts. There are a few advantages to using a Utah DAPT trust:
- Assets placed in the trust are immediately protected from future creditors and litigators
- Assets are protected from current unknown creditors within no more than two years.
- The settlor of the trust can be named a beneficiary of the trust.
- The settlor is permitted to live in and use property owned by the trust without the risk of losing the property to creditors.
- The settlor can name themselves a co-trustee
- The settlor can remove individuals and appoint trustees who have the power to make discretionary distributions.
- The settlor can veto distributions, giving them the final authority over who receives assets from the trust.
- A friendly Trust Protector has the authority to amend or revoke the trust without the consent of another beneficiary of the trust.
If you are a high net worth individual and/or work in a profession with high liability risk (such as a doctor, lawyer, or business owner), it may be wise to examine how your estate could benefit from Utah’s asset protection laws. You can learn more about this law and how it could affect your estate plan in a consultation with one of John Park Law’s experienced Utah estate planning attorneys – serving Salt Lake City from our Cottonwood Heights office location.
How Many States Have Asset Protection Trust Laws?
Utah is one of 17 states with asset protection trust laws. The other 16 include:
- New Hampshire
- Rhode Island
- South Dakota
- West Virginia
Protecting Your Utah Assets With John Park Law
While Utah’s asset protection laws do offer unique benefits not found in many other states, neighboring Nevada’s asset protection laws may be the best in the nation. Utah’s asset protection law has certain restrictions that Nevada’s law does not. Here are a few reasons why Nevada may have the best asset protection trust laws in the nation:
- Unlike Utah, Nevada is one of seven states that do not tax undistributed trust income. Thus, establishing a trust in Nevada could save estate holders significant money in tax payments.
- Nevada does not recognize exception creditors, such as Domestic Support Obligations (alimony and child support) creditors and tort creditors. In other states, these creditors are permitted to circumnavigate protections provided by asset protection laws.
- Nevada does not have a state income tax.
For some individuals, it may be possible to set up an irrevocable trust in Nevada through entities like limited liability companies (LLCs). Those who are considering setting up a DAPT should consider discussing their family’s options with an experienced estate planning attorney. At John Park Law, we have estate planning attorneys licensed to practice in Utah, Nevada, and California. Get in touch with us today at 801-701-3330 to learn more about asset protection trusts and other estate planning matters.