What are the Benefits of a Delaware Asset Protection Trust?

    Effective July 1, 1997, Delaware law began permitting a grantor to place assets in an irrevocable trust beyond the reach of creditors while still retaining certain interests in, and powers over, the trust. Delaware, which takes a proactive approach to maintaining a trust friendly environment, has amended the Delaware Qualified Dispositions in Trust Act over three years to enhance its results and to increase the attractiveness of Delaware as a trust location.

    The Act imposes certain limitations, such as a period of time (generally four years) during which creditors can challenge transfers to the trust as being fraudulent. Therefore, individuals transferring assets to a Delaware Asset Protection Trust must be prepared to show that the transfer was not fraudulent. In addition, claims such as alimony, child support and tort injuries incurred prior to the date of the trust are exempt from creditor protection for public policy reasons.