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Domestic Asset Protection Trusts: Key Income and Transfer Tax Implications

Structuring DAPTs to Minimize Federal and State Taxes, Gifting, Creditor Issues, Other Legal Implications

Recording of a 90-minute CLE/CPE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Conducted on Tuesday, September 26, 2023

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide trusts and estates counsel an in-depth analysis of federal income and transfer tax consequences of domestic asset protection trusts (DAPTs). The panel will discuss key tax planning issues and structuring techniques to minimize federal and state taxes, navigating the differences between jurisdictions, and analyze other legal implications and limitations.

Description

Domestic asset protection trusts (DAPTs) are an integral part of many estate and asset protection plans. Under current tax law, trusts and estates counsel must identify critical structuring techniques and significant differences among jurisdictions to minimize income and transfer taxes.

States have enacted asset protection legislation allowing individuals to create a trust with themselves as a beneficiary while still removing the trust assets from the reach of their creditors and estate taxation. However, they raise significant federal income and transfer tax issues to consider when structuring transactions.

Trusts and estates counsel are considering establishing DAPTs to lock in transfer tax exemptions. The IRS acknowledges that a transfer to a DAPT can be a completed gift even if the asset is distributed back to the settlor at the trustee's discretion. If a grantor makes a transfer while retaining the right to the income from the asset, then it may be included in the estate under Section 2036. Furthermore, a DAPT might be used to escape the income taxes of many states if structured correctly, but if not, unintended state taxes can be significant.

Listen as our panel comprised of estate planning, tax, and asset protection experts discusses best practices for using DAPTs, essential structuring techniques to minimize income and transfer taxes, identifying the differences among jurisdictions, and other tax and legal implications.

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Outline

  1. Asset protection planning under current tax law
  2. How the domestic asset protection trust works
    1. Statute of limitations
    2. Fraudulent transfers
    3. Exception creditors
  3. Structuring DAPTs to minimize income and transfer taxes
  4. State law considerations

Benefits

The panel will review these and other key issues:

  • In asset protection planning, what factors should counsel consider in deciding how and where to structure the DAPT?
  • How does the DAPT work and what are the rules regarding statute of limitations, fraudulent transfers, and creditor exceptions?
  • What factors must be considered in structuring DAPTs to minimize income and transfer taxes?
  • What state law issues must be considered?

Faculty

Gopman, Jonathan
Jonathan E. Gopman
Partner
Nelson Mullins Riley & Scarborough

Mr. Gopman's practice focuses on sophisticated wealth accumulation and preservation planning strategies for...  |  Read More

Redler, Craig
Craig S. Redler
Attorney
Law Offices of Craig S. Redler

Mr. Redler has held positions with Amicorp in its offices in Auckland New Zealand and Miami Florida, and Southpac Trust...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

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