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Delaware Protection Trust Analysis

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A Delaware Protection Trust (DAPT) is an irrevocable self-settled trust that is for the settlors own benefit. Since the Trust is self-settled, the grantor is still able to maintain some degree of control through appointment, removal, and decision making procedures (Karl & Levin, 2013). A DAPT trust can contain a wide array of assets, depending on the type of restriction in place by the applicable state laws of the grantors residence. A DAPT trust can is method for securing and protecting ones assets from future creditor or ex-spouses (Begley, 2014). Having said this, there are some things to consider in order ensuring that a DAPT is initiated in such a way that it could not be pierced on the grounds of fraud or ex-spousal rights. Specifically, if a DAPT is established after a marriage, the assets will be susceptible to ex-spousal claims. In addition, if transfers to a DAPT trust are determined to be of a fraudulent nature, action can be brought before the court in an attempt for creditors to access the DAPT assets. Specifically, Delaware operates under a four year statute of limitation with some exception is the creditor had claims on the assets prior to the establishment of the DAPT (Karl & Levin, 2013). In addition to the DAPTs ability to protect ones assets, it can also serve as a way to remove assets from ones estate.

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