Our trust are proven to work better than Self-Settled Domestic Asset Protection Trusts (DAPT). Even though several states have passed DAPT statutes, promoters fail to mention that there is not a single court case upholding a DAPT. Our 541 Trust® is supported by generations of legal precedent and has been upheld in lawsuits, bankruptcies, and IRS audits. The chart below explains in detail the flaws of DAPTs and the benefits of our 541 Trust®.
| Criteria | DAPT | 541 Trust® |
| Effective Jurisdictions | Currently only 15 States have enacted DAPT statutes. | Our trusts are effective under the laws of all 50 States and the Federal Bankruptcy code. |
| Case Law | DAPTs have yet to be truly tested in court. It is likely that a DAPT may be effective in a lawsuit in the state where it was created. If, however, you are sued in a state that does not have a DAPT statute, that state’s laws will apply, NOT the laws of the DAPT state. There are ZERO court cases upholding DAPTs. The only court cases dealing with DAPTs have defeated the trusts. See In re Mortensen Battley v. Mortensen, (Adv. D.Alaska, No. A09-90036-DMD, May 26, 2011), Waldron v. Huber (In re Huber), 2013 WL 2154218 (Bk.W.D.Wa., Slip Copy, May 17, 2013, and the following article on Why Self-Settled Trusts Don’t Protect Assets as well. | There is an enormous body of law supporting our 541 Trust®. Click HERE for Law and Precedent Supporting our trusts. |
| Bankruptcy | DAPTs do not protect assets in a bankruptcy. See US Bankruptcy Code Section 548(e), In re Mortensen, and Waldron v. Huber. | Our 541 Trust® is effective under the Federal Bankruptcy Code. See US Bankruptcy Code Section 541(b)(1). |
| Confidentiality | DAPTs MUST be disclosed on a standard bankruptcy questionnaire; and failure to disclose can result in bankruptcy fraud and criminal penalties. | Our 541 Trust® is required to be disclosed on a bankruptcy questionnaire. While privacy is important to many, even if discovered or disclosed, our trusts still protects the assets, unlike DAPTs. |
| Appearances | Creditor attorneys pounce on trusts specifically created for asset protection. DAPTs are asset protection trusts created under statutes that specifically refer to the purpose being “asset protection.” It could be easier to argue fraudulent transfer if the purpose of the trust is clearly for asset protection. | Our 541 Trust® is an ordinary estate planning tool established for legitimate purposes and do not raise a red flag or indicate unethical or inappropriate activity. |
| Cost & Complexity | DAPTs must meet all the requirements of the DAPT statute. This includes having a qualified trustee in the DAPT state. Professional trustee fees and attorney fees add to the ongoing costs of a DAPT. | Because our 541 Trust® is accepted and upheld in all jurisdictions, it is possible to minimize or avoid significant annual fees. |