Other Considerations

    Anyone considering a Delaware Asset Protection Trust must be comfortable with the idea of giving up substantial control over the trust assets. Some attorneys suggest taking a “nest egg” approach to a Delaware Asset Protection Trust, emphasizing the importance of retaining sufficient liquidity outside of the trust.

    The technique has not been tested in the U.S. courts, and a Delaware Asset Protection Trust may be susceptible to being set aside pursuant to an out-of-state judgment. Despite this uncertainty, Delaware Asset Protection Trusts continue to grow in popularity. Clients and their attorneys must weigh the potential benefits of a Delaware Asset Protection Trust against the outstanding issues regarding their effectiveness.

    A Delaware Asset Protection Trust should not be evaluated on a stand-alone basis, but instead as part of your overall financial wealth transfer goals. Delaware Asset Protection Trusts can be structured in a number of ways to facilitate income and transfer tax planning as well as to take advantage of Delaware’s favorable trust and tax laws. For all of the reasons, it is essential that anyone considering an asset protection trust consult an attorney who is well-versed in this area.