In the past, creditors could access any assets held in a trust, so long as you retained the right to remove assets for your own benefit. Today, Utah has one of the best asset protection trust statutes in the U.S. According to Utah Code § 25-6-502, you can shield some of your hard-earned assets from creditors by placing them in a Utah Domestic Asset Protection Trust (UDAPT).
Benefits of a Utah Domestic Asset Protection Trust
With a Utah asset protection trust:
- You can fund the trust with any type of assets you wish.
- You maintain complete control over the investment and management of the assets in the trust.
- You can name yourself, your spouse, or your family as beneficiaries of the trust if the assets are needed in the future, if you have a co-trustee who makes decisions regarding distribution. This co-trustee can be a friend, family member, or other trusted party.
- Once assets are placed in the trust, they are immediately protected from creditor claims and lawsuits.
The following requirements apply to Utah asset protection trusts:
- The trust must have at least one Utah trustee.
- The trust must hold some Utah assets (it can also hold assets in other states).
- After making a contribution to the trust, you must sign an affidavit that you are still financially solvent (that you have more assets than liabilities).
- The trust must be irrevocable, but you can build some flexibility into the trust that would allow you to remove or change trustees, which could influence the final distribution of the trust.
Is a Utah Asset Protection Trust Right for You?
The decision to establish a Utah asset protection trust should not be made lightly. The estate planning attorneys at Pearson Butler can work closely with you to analyze your current financial situation, your goals, and your assets, and can determine precisely how such a trust may affect you now and into the future. We can help you make the right choice and can then take the steps necessary to establish a trust that will provide all the benefits you need.
Schedule a confidential consultation with one of our seasoned professionals by calling (800) 265-2314. We have offices in American Fork, South Jordan, and Bountiful and represent clients across Utah.