Worshiping At the Feet of Wealth: Self-Settled Asset Protection Trusts and Their Public Policy Implications

The primary concern of this note is summarizing the public policy concerns concerning Domestic Self-Settled Asset Protection Trusts (DAPT) debated by scholars in a concise way and critiquing them. Secondly, this note seeks to compile various alternative structures suggested by scholars. Part I will explain the basic nature of spendthrift trusts and explain the history leading to the current DAPT structure. Part II will briefly explore the differences between Offshore Self-Settled Asset Protection Trusts (OAPTs) and DAPTs. Part III provides an overview of the relevant policy arguments for and against DAPT statutes and an analysis of their relative persuasiveness. Part IV suggests potential solutions to mitigate potential harms from the current DAPT structure. Finally, Part V concludes the paper with a summary