What is a Domestic Asset Protection Trust (DAPT)?

A DAPT is an irrevocable self-settled spendthrift trust authorized by statute in certain US states. The grantor transfers assets to the trust and can be a discretionary beneficiary, with the trust assets generally protected from the grantor's own creditors after the applicable look-back period expires. The trust is governed by the law of the DAPT state and administered by a trustee in that state. The first US DAPT statute was enacted by Alaska in 1997 (AS §34.40.110); 19 states have enacted DAPT statutes as of 2026.

How long is the DAPT look-back period?

Look-back periods vary by state: Nevada is 2 years (NRS §166.170), South Dakota is 2 years (SDCL §55-16-10), Delaware is 4 years (12 Del. C. §3572), Wyoming is 4 years (Wyo. Stat. §4-10-510), and Alaska is 4 years (AS §34.40.110). However, federal bankruptcy law imposes a 10-year look-back under 11 USC §548(e) for self-settled trusts: a debtor who files bankruptcy within 10 years of funding a DAPT can have the transfer set aside if it was made with actual intent to hinder, delay, or defraud creditors. The 10-year federal bankruptcy look-back generally trumps the shorter state-law look-back for any debtor who might file federal bankruptcy.

Domestic Asset Protection Trust (DAPT): Self-Settled Spendthrift Trusts in 19 States (2026)

Q: Which states have DAPT statutes?

As of 2026, 19 US states have enacted DAPT statutes: Alaska, Delaware, Hawaii, Michigan, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming, plus Connecticut and Indiana. The principal DAPT jurisdictions for substantial planning are Delaware, Nevada, South Dakota, Alaska, and Wyoming, each with distinctive statutory features and trust industry infrastructure.

Q: Are DAPTs respected against creditors in the grantor's home state?

Uncertain and fact-specific. Courts in the grantor's home state may apply choice-of-law analysis to determine whether the DAPT state's law applies. Generally, the DAPT has the best chance of being respected if (a) the grantor has minimal contacts with the home state at the time of funding, (b) the trust is funded well before any creditor claim arises, (c) the trustee and trust administration are entirely in the DAPT state, and (d) the trust holds assets not located in the grantor's home state. Some non-DAPT states (e.g., the Massachusetts Lifetime Family Limited Partnership case In re Huber 493 B.R. 798) have set aside DAPTs of home-state grantors. The conflict-of-law analysis must be done with experienced counsel in both jurisdictions.

Q: Can the grantor be a beneficiary of the DAPT?

Yes. The defining feature of a DAPT is that the grantor can be a discretionary beneficiary. Distributions to the grantor are at the trustee's sole discretion; the grantor has no enforceable right to compel distribution. This discretionary structure is what allows the trust assets to be protected from the grantor's creditors despite the grantor's beneficial interest. The grantor cannot be a trustee, cannot have a right to demand distributions, and cannot have any power to compel the trustee to distribute. The trustee (a DAPT-state resident individual or trust company) holds the distribution power.

A DAPT is the only US trust structure that allows the grantor to be both a creator and a discretionary beneficiary while shielding assets from the grantor's own creditors. Available in 19 US states. Federal bankruptcy 10-year look-back applies.

Not legal or tax advice. DAPT planning involves complex conflict-of-law analysis, federal bankruptcy considerations, and the Uniform Voidable Transactions Act in the grantor's home state. Drafting and funding timing are critical. Consult qualified counsel in both the DAPT state and the grantor's home state.

The Common-Law Rule Against Self-Settled Spendthrift Trusts

Under traditional common law, a self-settled spendthrift trust (a trust created by the grantor for the grantor's own benefit, with a spendthrift clause) does not shield the trust assets from the grantor's creditors. The Restatement (Third) of Trusts §58 articulates this rule, and most US states followed it. The common-law rule is that a person cannot place their own assets beyond the reach of their own creditors merely by transferring them to a trust naming themselves as beneficiary.

The policy concern is that allowing self-settled spendthrift trusts would let debtors place all their assets behind a creditor barrier while continuing to enjoy beneficial use, defeating the legitimate claims of creditors. The common-law rule protects creditors and the integrity of credit markets.

DAPT statutes are statutory exceptions to the common-law rule. The DAPT state's legislature has, by statute, authorized self-settled spendthrift trusts that the state's courts will respect. The first US DAPT statute was Alaska's, enacted in 1997 (AS §34.40.110). Other states followed: Delaware (1997), Nevada (1999), South Dakota (2005), and additional states subsequently.

The 19 DAPT States and Their Statutory Features

As of 2026, the following 19 US states have enacted DAPT statutes:

Alaska - AS §34.40.110, the first US DAPT statute (1997), 4-year look-back.
Connecticut - effective 2020, 4-year look-back.
Delaware - 12 Del. C. §§3570-3576, enacted 1997, 4-year look-back, Court of Chancery jurisdiction.
Hawaii - HRS §554G, 2010, 4-year look-back.
Indiana - Ind. Code §30-4-8, 2019.
Michigan - MCL §700.7501 et seq., 2017, 2-year look-back.
Mississippi - Miss. Code §91-9-701, 2014, 2-year look-back.
Missouri - Mo. Rev. Stat. §456.5-505, 2004, 4-year look-back.
Nevada - NRS §166.040, 1999, 2-year look-back, no state income tax.
New Hampshire - RSA 564-D, 2008, 4-year look-back.
Ohio - ORC §5816.01 et seq., 2013, 18-month look-back (shortest).
Oklahoma - 31 Okla. Stat. §10 et seq.
Rhode Island - R.I. Gen. Laws §18-9.2-1 et seq., 1999, 4-year look-back.
South Dakota - SDCL §55-16, 2005, 2-year look-back, no state income tax, sealed proceedings.
Tennessee - Tenn. Code §35-16-101 et seq., 2007, 2-year look-back.
Utah - Utah Code §25-6-14, 2013, 2-year look-back.
Virginia - Va. Code §64.2-745.1 et seq., 2012, 5-year look-back.
West Virginia - W. Va. Code §44D-5-503a, 2016, 4-year look-back.
Wyoming - Wyo. Stat. §4-10-510, 2007, 4-year look-back.

Each state's statute has distinctive features. The principal DAPT jurisdictions for substantial high-net-worth planning are Delaware, Nevada, South Dakota, Alaska, and Wyoming, each with deep trust company industries, established case law (where any exists for DAPTs), and tax benefits. See our state pages for Delaware and South Dakota.

Common DAPT Statutory Requirements

DAPT statutes generally share a common structural framework with state-specific variations. The typical requirements include:

Irrevocable trust: the trust must be irrevocable. A revocable trust is not eligible for DAPT protection because the grantor retains too much control.
Spendthrift clause: the trust instrument must include an enforceable spendthrift provision restraining alienation by beneficiaries and protecting against creditors.
DAPT-state trustee: at least one trustee must be a resident of the DAPT state, or a trust company authorized to act as trustee in the DAPT state. The DAPT-state trustee must hold custody of trust records and conduct trust administration in the DAPT state.
Discretionary distributions to grantor: the grantor cannot have an enforceable right to compel distributions. All distributions to the grantor must be at the trustee's discretion.
Trust assets located in or controlled from DAPT state: the trust should hold non-home-state assets where possible, or assets controlled through the DAPT-state trustee.
Statute of limitations: existing creditors must bring fraudulent transfer challenges within the statutory look-back (2 to 5 years depending on state); subsequent creditors must bring challenges within a similar period from when the claim arose.

The Federal Bankruptcy 10-Year Look-Back

11 USC §548(e) (enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) provides that the bankruptcy trustee may avoid any transfer of an interest by the debtor in property to a self-settled trust or similar device, made within 10 years before the bankruptcy filing, if the debtor made the transfer with actual intent to hinder, delay, or defraud creditors.

The §548(e) 10-year federal bankruptcy look-back is significantly longer than any state-law DAPT look-back. For a grantor who might foreseeably file federal bankruptcy within 10 years of funding the DAPT, the trust does not provide reliable protection. Federal bankruptcy courts have used §548(e) to set aside DAPT structures of debtors who funded shortly before bankruptcy (see In re Mortensen, 2011 Bankr. LEXIS 1815 (Bankr. D. Alaska 2011), where an Alaska DAPT was set aside in federal bankruptcy).

DAPTs work best for grantors with no known or foreseeable creditor risk at the time of funding. They are most often used by professionals (physicians, lawyers, architects, engineers) protecting against future malpractice claims that have not yet arisen, by wealthy individuals protecting against unknown future contingent claims, and by business owners protecting personal assets from unrelated business risks. They do not work for debtors trying to outrun known existing creditors or imminent claims.

Conflict of Law: Home State Recognition

The biggest practical question for DAPT planning is whether the grantor's home-state courts will respect the DAPT against a home-state creditor or judgment. The answer depends on home-state choice-of-law rules and the home-state's policy regarding self-settled spendthrift trusts.

Some home states have explicitly hostile statutes. New York EPTL §7-3.1(a) explicitly voids self-settled spendthrift trusts as against the grantor's creditors. California Probate Code §15304 takes a similar position. Florida case law has reached the same result through case interpretation. In these jurisdictions, home-state courts may refuse to apply DAPT-state law to a home-state grantor's trust if the trust is challenged in home-state proceedings.

The DAPT has the best chance of being respected if (a) the home-state grantor has minimal home-state contacts at funding, (b) the trust is funded well in advance of any creditor claim (ideally years before any litigation is foreseeable), (c) the trustee and administration are entirely in the DAPT state, (d) the trust holds non-home-state assets where possible, and (e) the trust documents and operations strongly establish DAPT-state situs. Practitioners typically work with counsel in both the DAPT state and the home state to design the structure with these factors in mind.

Federal courts applying state law (e.g., in federal diversity jurisdiction) will generally apply the home-state's choice-of-law rules. Federal bankruptcy courts have nationwide jurisdiction and have been willing to look through DAPT structures under §548(e) where the planning circumstances suggest creditor avoidance.

DAPT vs Offshore Asset Protection

Before the first US DAPT statute in 1997, asset protection planning was dominated by offshore trusts in jurisdictions such as the Cook Islands, Nevis, Cayman Islands, and Bermuda. Offshore jurisdictions have well-established asset protection law, short statutes of limitations (typically 1-2 years), and resistance to US court judgments.

DAPTs offer several advantages over offshore: (a) US courts and US law (more familiar to US grantors and counsel), (b) no foreign trust reporting obligations under IRC §6048 (Form 3520 and Form 3520-A), (c) no foreign bank account reporting (FBAR), (d) US dollar denomination of trust assets, (e) US trustee accountability and oversight, and (f) generally lower administrative costs.

Offshore trusts retain certain advantages: (a) generally more aggressive creditor protection (shorter look-backs, stricter pleading standards), (b) trustees not subject to US court orders, (c) ability to flee the jurisdiction if necessary. For grantors with extreme creditor exposure, offshore may still be the right choice. For most US-resident planning, DAPTs are now the default domestic structure.

Frequently Asked Questions

What is a DAPT?

An irrevocable self-settled spendthrift trust authorized by statute in 19 US states. Grantor can be a discretionary beneficiary; trust assets protected from grantor's own creditors after the state-law look-back. First US DAPT: Alaska 1997 (AS §34.40.110).

Which states have DAPT statutes?

19 states as of 2026: Alaska, Connecticut, Delaware, Hawaii, Indiana, Michigan, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia, Wyoming. Principal jurisdictions: Delaware, Nevada, South Dakota, Alaska, Wyoming.

How long is the DAPT look-back?

State-law look-backs range from 18 months (Ohio) to 5 years (Virginia), most commonly 2-4 years. Federal bankruptcy 10-year look-back under 11 USC §548(e) trumps state law for debtors who file federal bankruptcy within 10 years of funding.

Are DAPTs respected against creditors in the grantor's home state?

Uncertain and fact-specific. Some non-DAPT states (NY EPTL §7-3.1, CA Prob. Code §15304) explicitly void self-settled spendthrift trusts. Strongest cases: grantor has minimal home-state contacts, trust funded well before any creditor claim, trustee and assets in DAPT state.

Can the grantor be a beneficiary of the DAPT?

Yes. The defining feature is that the grantor can be a discretionary beneficiary. Distributions are at the trustee's sole discretion; grantor cannot compel distribution. Grantor cannot be trustee. This discretionary structure is what permits asset protection despite beneficial interest.