Domestic Asset Protection Trusts
Prenuptial agreements have their place, but asking a prospective marriage partner to sign a form waiving the right to assets should a divorce be necessary is often seen as a sign that the one partner does not have faith in the relationship. Prenuptial alternatives in Conroe, Texas and elsewhere are useful for this reason. One such alternative is a domestic asset protection trust.
Prenuptials and Prenuptial Alternatives in Conroe, Texas
As unromantic as it may be, the sad truth is that the majority of marriages do not last these days. When a spouse enters into the marriage with assets, these become a part of the marital estate unless some provision is made that excludes them. Prenuptials and prenuptial alternatives in Conroe, Texas accomplish this.
A domestic asset protection trust (DAPT) protects assets from a spouse upon divorce, as well as creditors. The DAPT is termed a “self-settled” form of trust, and as such the person establishing it can name himself as the beneficiary. With a DAPT, moreover, the prospective spouse is not legally compelled to inform the other that it is being established, nor of the assets which will be placed in the it. This may sound somewhat devious, but consider the alternative: one's hard-earned assets which were acquired prior to the marriage, and that the other spouse had no part of acquiring, could otherwise be split between the two upon a divorce.
Requirements for Establishing a Domestic Asset Protection Trust
DAPTs are not difficult to establish, and they have a fair degree of flexibility in the way they are developed and implemented. However, in order for a DAPT to be valid it must be set up properly, which entails, among other things, the following:
- The trust must be irrevocable or unchangeable.
- A trustee is to be appointed who administers the trust.
- The trustee must reside within the jurisdiction where the trust was established.
- The trust must contain a spendthrift clause. This restricts transfer of interest in the trust until it is distributed.
Among prenuptial alternatives in Conroe, Texas, a DAPT is a good choice if one wants assets both safe but available for use. Depending upon the provisions included in the language of the trust the grantor may be able to receive assets from it while it is in force.
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