DAPT Facts: The Structure That Fails on Its Own Merits

Most published discussion of asset protection case law asks whether offshore trusts hold up. The mirror question gets far less attention: what happens when a domestic asset protection trust is tested by a court that is not bound by the statute it was built on. This page is the record of those cases, and it will grow as our attorneys work through further decisions.

The distinction that matters is not whether a settlor behaved badly. Our review of the offshore case law found that adverse offshore outcomes trace to conduct and timing: funding after a claim arose, retaining control, concealment, or underlying crime. The DAPT cases are different in kind. In the leading decision, the settlor did substantially what the statute asks and lost anyway, because a federal court declined to apply the state law the entire structure depends on.

Why a DAPT Can Fail on Its Own Merits

A domestic asset protection trust is a self-settled spendthrift trust: the settlor funds it and remains a beneficiary, and a state statute instructs courts not to let the settlor's creditors reach it. At common law that trust would not have protected anyone. The protection is entirely a creature of the enacting state's statute.

That is the vulnerability. The statute binds the courts of the state that passed it. It does not bind a federal bankruptcy court applying the Bankruptcy Code, and it does not automatically bind the courts of another state with a closer connection to the dispute. Where the deciding court declines to apply it, there is no fallback: the structure has no protective feature independent of the statute. Our broader survey of what U.S. courts have said about DAPTs collects the recurring themes; this page documents the individual defeats. For how this record sits alongside the foreign one, see our overview of both kinds of asset protection trust.

What the Reported Record Can and Cannot Show

One caveat belongs at the top, because it cuts both ways. These are decisions that produced a published appellate opinion or a reported bankruptcy ruling. They are not the whole population of DAPT disputes - most are resolved at trial-court level and leave no citable trace.

That omission is unlikely to be neutral. A settlor who loses a turnover motion, absorbs a fraudulent-transfer finding, or settles once the structure is exposed has little incentive to appeal, and the creditor who won has none. Those outcomes end in unpublished orders, consent judgments and abandoned positions. So the reported record - in which failures already outnumber successes several times over - probably understates how often these structures fail when actually tested. We cannot prove that with citations, which is precisely the point, and it is why the page is a record of decisions rather than a batting average.

Seventeen states now authorize these trusts: Alaska, Delaware, Hawaii, Michigan, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wyoming.

How These Cases Fail

The defeats below are not twelve separate accidents. They cluster into four recurring mechanisms, and only the last is about the settlor behaving badly:

• Federal bankruptcy law displaces the state statute. Section 548(e)'s ten-year reach-back, and its "similar device" language, override state characterization entirely - Mortensen, Huber, Castellano, Cyr, Erskine.
• Another state's law decides the question. Where the assets, the settlor or the marriage sit outside the DAPT state, the forum applies its own public policy - Huckaby, Huber, Dahl, Netter, Kilker.
• The exclusive-jurisdiction clause does not bind anyone else. The provision that is supposed to force creditors into a friendly forum is unenforceable past the enacting state's borders - Toni 1, Kloiber.
• The trust was never really separate. Retained powers, self-trusteeship and personal use collapse the structure on its own terms - Erskine, Magliarditi.

The Case Record

Each entry is written from the court's own decision. Where the opinion is publicly reachable we link it so the reasoning can be checked directly; where it is not, we give the reporter citation.

1. Battley v. Mortensen (Bankr. D. Alaska 2011)

Battley v. Mortensen (In re Mortensen), Adv. No. A09-90036-DMD, 2011 WL 5025249 (Bankr. D. Alaska May 26, 2011). The court's memorandum decision is published by the District of Alaska bankruptcy court.

The structure. Thomas Mortensen, an Alaska resident, created the Mortensen Seldovia Trust under AS 34.40.110 and registered it on February 1, 2005. He funded it with a remote 1.25-acre parcel near Seldovia, Alaska, worth roughly $60,000 at the time. His brother and a personal friend served as trustees; his mother was named Protector with power to remove and appoint successor trustees. He drafted the document himself from a template he had found and then had an attorney review it, and the attorney suggested only minor changes.

What he did right. He was a resident of the DAPT state using that state's own trust. No creditor held a claim against the parcel when he transferred it. He filed the affidavit AS 34.40.110(j) requires, swearing he owned the property, was financially solvent, had no intent to defraud creditors, and faced no pending or threatened proceedings. The court accepted that the trust "was created in accordance with Alaska law" and declined to void it on the trustee's state-law insolvency theory.

What happened. Mortensen's finances deteriorated over the following years. In August 2009, about four and a half years after funding the trust, he filed Chapter 7 with roughly $251,000 in credit card debt across twelve cards and about $8,000 in medical debt. The bankruptcy trustee sued to avoid the 2005 transfer, and the court found for him under section 548(e): the transfer fell within the ten-year window, went to a self-settled trust of which the debtor was a beneficiary, and was made with actual intent to hinder, delay, and defraud creditors.

How the court found intent. It started with the trust's own language. The instrument recited that its express purpose was "to maximize the protection of the trust estate or estates from creditors' claims," and the court held that this purpose was itself to hinder, delay and defraud present and future creditors. It then added the surrounding facts: Mortensen's earnings had averaged about $11,644 a year over the four preceding years against roughly $60,000 in annual overhead, and he already carried credit card debt somewhere between $49,711 and $85,000 when the trust was created. After the transfer his mother sent him $100,000 in two checks, referencing the Seldovia property. He did not pay off his credit cards. He moved $80,000 of it into the trust and began speculating in the stock market.

Why it is a DAPT failure. Because the state statute did not decide the case. Mortensen argued that Alaska's shorter limitation period should control; the court refused, reasoning that it "would be a very odd result for a court interpreting a federal statute aimed at closing a loophole to apply the state law that permits it," and that "Congress has codified a federal interest which requires a different result." Section 548(e), the court noted, was added by the 2005 bankruptcy amendments and aimed squarely at the handful of states that had authorized self-settled trusts, Alaska among them.

Full write-up. We walk through the decision in detail - what he did right, how the court found intent, and what the case does not establish - in Battley v. Mortensen: The DAPT That Followed the Rules and Lost.

The rule it establishes. A DAPT's seasoning period is only as good as the forum. In bankruptcy, the relevant clock is the federal ten years, and the trust's own asset-protection recital is available to the trustee as evidence of the intent that provision requires.

2. United States v. Huckaby (E.D. Cal. 2026)

United States v. Huckaby, No. 2:23-cv-00587-DAD-JDP (E.D. Cal. Mar. 2, 2026). The court's order granting summary judgment in part is published by GovInfo.

The structure. Robert Huckaby and Joyce Tritsch executed a trust instrument creating the Circle H Bar T Trust, designated a Nevada spendthrift trust by its own terms. They were its settlors, its trustees, and its sole beneficiaries during their lifetimes. On October 17, 2011 they transferred into it a property on Alice Lake Road in South Lake Tahoe, California.

What they did right on timing. The transfer came first. The United States did not obtain its judgment against Huckaby until March 30, 2018 - more than six years after the property went into the trust. Whatever else this case is, it is not a transfer made in the face of an existing judgment.

What happened. The judgment went unsatisfied, and by June 15, 2025 the balance owed stood at $87,959.84. The government sued to enforce it against the Tahoe property. The court granted summary judgment in part, declaring that the United States' judgment lien encumbers Huckaby's one-half interest in the property and that the government may submit a proposed order of foreclosure.

How the court got past the Nevada trust. By separating two questions that are easy to conflate. The court agreed with the defendants that the trust instrument itself is construed under Nevada law, citing the Restatement (Second) of Conflict of Laws section 277. But construing the document was not the issue. The issue was whether the land held in that trust could be reached, and for that the court applied the law of the place where the land sits - California.

Under California Probate Code section 15304, a settlor of a spendthrift trust cannot also be its beneficiary; California voids self-settled spendthrift provisions precisely to stop people placing property beyond creditors while retaining the benefit of it. Because Huckaby and Tritsch were trustors, settlors, trustees and beneficiaries of the same trust, its spendthrift protection was void as to the California land.

The defendants argued section 15304 should not apply because the transfer predated the government's lien. The court found nothing in the statute limiting its effect to land placed in trust after a lien arises.

Why it is a DAPT failure. Because the trust lost without anyone proving misconduct. The court did not need to reach the government's alter-ego and nominee theories, and it did not need a finding of fraudulent intent - it denied the rest of the motion and decided the case on choice of law alone. The Nevada designation simply did not travel with the California dirt.

Related California authority. California courts applied California fraudulent-transfer law to California real estate moved into a Nevada trust in Kilker v. Stillman, entry 9 below.

The rule it establishes. A DAPT does not convert out-of-state real estate into DAPT-state property. Where the asset is real property, the law of its location tends to govern whether creditors can reach it, whatever the trust's governing-law clause says - and in a state that voids self-settled spendthrift trusts, that is the end of the protection.

3. Toni 1 Trust v. Wacker (Alaska 2018)

Toni 1 Trust v. Wacker, 413 P.3d 1199 (Alaska 2018).

What happened. Donald Tangwall sued the Wackers in Montana; they counterclaimed and took default judgments against him and his family. Two relatives then transferred real property into the Toni 1 Trust, an Alaska trust. The Wackers obtained Montana judgments declaring those transfers fraudulent, and after one relative filed Chapter 7 a federal bankruptcy court entered a further default judgment avoiding them. Tangwall, as trustee, sued in Alaska for a declaration that both judgments were void under AS 34.40.110(k) - the provision purporting to vest Alaska courts with exclusive jurisdiction over fraudulent-transfer claims against Alaska trusts. The Alaska Supreme Court affirmed dismissal. No state can compel its sister states to surrender jurisdiction over transitory causes of action arising under their own law, and no state statute can strip a federal court of jurisdiction. The judgments stood.

Why it is a DAPT failure. This one defeats a pillar of the architecture rather than one settlor's bad facts, and it does so in the DAPT state's own supreme court. Exclusive-jurisdiction clauses are unenforceable past the enacting state's borders. A creditor can litigate the transfer wherever it finds the settlor or the assets, take judgment there, and the DAPT state cannot treat that judgment as void.

4. Waldron v. Huber (In re Huber) (Bankr. W.D. Wash. 2013)

Waldron v. Huber (In re Huber), 493 B.R. 798 (Bankr. W.D. Wash. 2013).

What happened. Donald Huber, a Washington real-estate developer, created an Alaska DAPT in 2008 as the regional market collapsed and lenders pursued him on guarantees. Through a holding LLC he moved substantially all of his assets into it - Washington real estate, cash, receivables. An Alaska trust company served as one of three trustees alongside Huber's son, but the trust's only Alaska asset was a $10,000 certificate of deposit. The settlor, the beneficiaries, the other assets and the creditors were all in Washington. He filed bankruptcy in 2011. The court refused to apply Alaska law: under Restatement (Second) of Conflict of Laws section 270, Washington had the most significant relationship and a strong public policy, codified at RCW 19.36.020, voiding self-settled asset-protection transfers as against both existing and future creditors. It independently avoided the transfers under section 548(e) and under state fraudulent-transfer law incorporated through section 544.

Why it is a DAPT failure. A non-resident cannot buy into a DAPT statute from afar. Where the settlor, the assets, the beneficiaries and the creditors all sit in a state whose public policy voids self-settled trusts, the forum applies its own law and the structure collapses at step one - before anyone reaches the seasoning period.

5. Dahl v. Dahl (Utah 2015)

Dahl v. Dahl, 2015 UT 79, 345 P.3d 566 (Utah 2015).

What happened. Dr. Charles Dahl, a Utah cardiologist, created the Dahl Family Irrevocable Trust under Nevada law during a nearly eighteen-year marriage and funded it with substantial marital assets, including the family home. His brother served as investment trustee. When the marriage dissolved, Kim Dahl sought a share of the trust assets as marital property. The Utah Supreme Court refused to honor the Nevada choice-of-law clause, holding that Utah's strong public policy in the equitable division of marital assets required construing the trust under Utah law. It then held the trust revocable despite its "irrevocable" label, because the settlor had reserved "any power whatsoever" to alter or amend - and an unrestricted amendment power, under Utah law, includes the power to revoke. Because Ms. Dahl had contributed marital property without ever being named in the instrument, she remained a settlor and could revoke as to her own contributions.

Why it is a DAPT failure. One reserved power turned a nominally irrevocable Nevada trust into a revocable one, and a revocable trust protects nothing anywhere. The case is also a choice-of-law loss. It is worth stating the limit, though: the court expressly reserved whether a genuinely irrevocable trust would have met the same fate.

6. Netter v. Netter (Conn. App. 2025)

Netter v. Netter, 235 Conn. App. 774, 347 A.3d 882 (Conn. App. 2025).

What happened. During a Connecticut divorce it emerged that Donald Netter had moved most of the couple's marital assets into three South Dakota self-settled spendthrift trusts, created during the marriage without his wife's knowledge as the marriage deteriorated. They were structured as South Dakota qualified dispositions with standard spendthrift protection and required an independent South Dakota trustee's approval before distributions. The trial court treated the assets as marital on the basis that the husband alone controlled them. On appeal the Connecticut Appellate Court rejected that control finding but affirmed on other grounds: Connecticut law governed whether the assets were marital property, and the trusts fell outside Connecticut's own qualified-dispositions act because they designated South Dakota law - and predated that act in any event, when Connecticut voided self-settled trusts as contrary to public policy. (The court reversed all financial orders and remanded for a new trial on a separate ground, holding that a fourth trust created by the husband's father was not marital property.)

Why it is a DAPT failure. The trusts had independent trustees, discretionary distribution provisions and spendthrift clauses - and the choice-of-law clause is what defeated them. Selecting South Dakota law put them outside the forum's own DAPT statute, leaving them governed by the older Connecticut rule voiding self-settled trusts.

7. In re Daniel Kloiber Dynasty Trust (Del. Ch. 2014)

In re Daniel Kloiber Dynasty Trust, 98 A.3d 924 (Del. Ch. 2014).

What happened. Glenn Kloiber settled a Delaware dynasty trust for his son Daniel, who served as Special Trustee with exclusive authority to direct the trustee on investments, distributions and trust-owned entities. During Daniel's Kentucky divorce his wife contended that assets transferred into the trust - including Exstream Software stock that later sold for roughly $310 million - were marital property. The Kentucky Family Court entered status quo orders barring dissipation, which reached the trust because they restrained Daniel personally in each of his capacities. Daniel then resigned as Special Trustee and stepped down as manager of the trust's LLCs. When his successor and the trustee asked Delaware to bar enforcement of the Kentucky orders, the Court of Chancery refused. Vice Chancellor Laster held that the exclusive-jurisdiction language in Delaware's DAPT statute could not preclude a sister state from hearing the matter.

Why it is a DAPT failure. Delaware law does not govern the antecedent question of whether the settlor held the property rights necessary to make the transfer at all - that is decided by the law governing those rights, here Kentucky's. The statute's own carve-out for support, alimony and property division points the same way. Note this trust was settled by a father for his son rather than self-settled; what failed is the jurisdictional shield the DAPT statute promises.

8. TransFirst Group, Inc. v. Magliarditi (D. Nev. 2017)

TransFirst Group, Inc. v. Magliarditi, No. 2:17-cv-00487-APG-VCF, 2017 WL 2294288 (D. Nev. 2017), with subsequent certified-question proceedings.

What happened. TransFirst held a roughly $4 million unpaid Texas federal fraud judgment against Dominic Magliarditi and, after years of frustrated collection, sued him, his wife and a web of family entities and Nevada trusts alleging the entities and trusts were his alter egos. The court granted a preliminary injunction freezing the defendants' assets, finding a likelihood of success on the alter-ego theory: Magliarditi controlled the entities and trusts though they were nominally his wife's, and used them to pay personal expenses - gym memberships, flying lessons - while claiming to own essentially nothing himself. The court also predicted Nevada would extend alter-ego analysis beyond corporations to trusts, LLCs and partnerships.

Why it is a DAPT failure. Whatever a spendthrift statute says about a creditor's remedies against a trust, it does not immunize a structure the settlor treats as a personal pocketbook. Alter-ego and reverse-piercing theories attack the premise that the trust is a separate thing at all, and they run on facts - commingling, personal-expense payments, disregarded formalities - that no statute can legislate away.

9. Kilker v. Stillman (Cal. Ct. App. 2012)

Kilker v. Stillman, No. G045813, 2012 WL 5902348 (Cal. Ct. App. Nov. 26, 2012). Unpublished, and therefore not citable as precedent in California - included because the facts are instructive, not as authority.

What happened. Frank Stillman, a California soils engineer, formed a Nevada trust in 2004 and transferred to it virtually everything he owned - four properties, bank accounts, CDs, vehicles - leaving himself no asset worth more than $500 and receiving no consideration. He testified that the purpose was asset protection, his industry being litigious. Years later the Kilkers, homeowners for whom he had performed soil testing, obtained a $92,500 judgment after he failed to pay a settlement over their failed pool, and levied on trust-held property. The trial court found the transfer fraudulent under California's Uniform Fraudulent Transfer Act and the Court of Appeal affirmed: a transfer made to place assets beyond the reach of creditors is made with intent to hinder, delay or defraud, and the statute protects future creditors whose claims did not exist when the trust was funded. The court rejected the argument that Nevada law blessed the transfer, Nevada having enacted the same UFTA language.

Why it is a DAPT failure. Pre-claim funding is necessary but not sufficient. A trust funded years before any claim arose is still vulnerable where the settlor's own stated purpose was insulating assets from whatever creditors might later appear - the same evidentiary problem that sank Mortensen.

10. Safada v. Castellano (In re Castellano) (Bankr. N.D. Ill. 2014)

Safada v. Castellano (In re Castellano), 514 B.R. 555 (Bankr. N.D. Ill. 2014).

What happened. Linda Castellano was entitled to a one-quarter share of her mother's South Carolina living trust, whose spendthrift provision terminated a beneficiary's interest on bankruptcy or insolvency and converted it into a discretionary one. After becoming insolvent and preparing to file, she had counsel send the trustee an "Insolvency Letter" directing him to exercise that authority. Rather than distributing her inheritance outright, the trustee - the husband of her niece, appointed by the beneficiaries and subject to no court supervision - deposited her share into a newly opened account titled for her benefit. She acknowledged in writing that she would receive no direct distribution but retained a lifetime beneficial interest. The Chapter 7 trustee challenged the transaction under section 548(e). The court held she had indirectly transferred her inheritance into a self-settled trust or similar device, using the trustee as her "cat's paw," and recommended turnover.

Why it is a DAPT failure. Section 548(e)'s "similar device" language lets a bankruptcy court look past form and unwind a spendthrift structure the debtor caused to be created for her own benefit once insolvent - even though she never settled the trust herself. The reach of the provision is wider than the label "self-settled" suggests.

11. Rodriguez v. Cyr (In re Cyr) (Bankr. W.D. Tex. 2019)

Rodriguez v. Cyr (In re Cyr), 602 B.R. 315 (Bankr. W.D. Tex. 2019).

What happened. Dr. Steven Jeffery Cyr was a beneficiary and, until August 2017, a co-trustee of the Bergerud Heritage Trust - an irrevocable spendthrift trust created and initially funded by his wife's parents. While the Cyrs were contemplating bankruptcy, Cyr allegedly directed litigation proceeds, real property and business interests into the trust and trust-owned entities. After he filed Chapter 7, the trustee sought to avoid those transfers under section 548(e). On a motion to dismiss, the court rejected the argument that the Texas Trust Code barred the claims: the federal statute contains no reference to non-bankruptcy law, and its "similar device" language reaches trusts used to shield assets regardless of how state law characterizes them. Several claims survived; others were dismissed because the trustee had not pleaded that the property transferred was an interest of the debtor.

Why it is a DAPT failure. State-law asset-protection features do not necessarily survive bankruptcy scrutiny, and the applicable clock is section 548(e)'s ten years rather than the two years under section 548(a). The case also shows the counterweight, which is worth stating plainly: avoidance still requires the trustee to identify each transfer, trace an interest of the debtor, and plead actual intent.

12. In re Erskine (Bankr. W.D. Tenn. 2016)

In re Erskine, 550 B.R. 362 (Bankr. W.D. Tenn. 2016).

What happened. Robert Erskine filed Chapter 7 and argued that two business accounts were beyond the estate's reach because they belonged to an LLC whose sole membership interest was held by a trust he claimed qualified as a Tennessee Investment Services Trust. The trust named his four children as sole beneficiaries - but Erskine was its grantor and its trustee, and retained the power to direct distributions, to add or remove trust property at will, and to amend or revoke the instrument outright. Its spendthrift clause expressly carved out "my interest therein while I am living." The court held he retained a present beneficial interest notwithstanding the beneficiary designation, that the trust satisfied none of the statutory requirements beyond a Tennessee choice-of-law provision, and ordered turnover. It added an independent ground: the LLC had been administratively dissolved in 2012, so its assets devolved on its member.

Why it is a DAPT failure. A purported DAPT collapses entirely when the statutory formalities are ignored. Revocable rather than irrevocable, settlor serving as his own trustee rather than appointing a qualified one, no Qualified Affidavit ever executed, and a retained power to withdraw property at any time - which left a present beneficial interest that passed straight into the bankruptcy estate.

When a DAPT Has Held Up

A record of defeats that never records a win is advocacy, not a record. Three reported decisions are usually cited as DAPT successes, and each is a genuine one - but each also comes with a limit that the citing usually omits.

Klabacka v. Nelson (Nev. 2017)

Klabacka v. Nelson, 133 Nev. 164, 394 P.3d 940 (Nev. 2017). This is the strongest DAPT win in the reported case law.

Eric and Lynita Nelson transmuted their community property into separate property by agreement and, in 2001, funded separate Nevada self-settled spendthrift trusts. On divorce, the trial court found the trusts valid but ordered roughly $8.7 million equalized between them, imposed constructive trusts over two properties, and directed Eric's trust to satisfy his personal obligations. The Nevada Supreme Court reversed the substance of that: the trusts were valid, the district court had improperly used parol evidence to vary their unambiguous terms, and NRS Chapters 163 and 166 bar court-ordered distributions of trust assets to satisfy a beneficiary's personal obligations not known when the trust was created. It expressly declined to adopt the Restatement (Third) of Trusts section 59 support exception, calling that a question for the Legislature.

The limit. The court did not treat everything nominally held in the trusts as protected. It faulted the district court for failing to trace the assets and directed that any community property found inside the trusts be divided equally. It also affirmed the family court's jurisdiction over the trust claims and affirmed the alimony and child-support awards in substance - vacating them only insofar as they ran against Eric's trust rather than against Eric personally.

In re CES 2007 Trust (Del. Ch. 2025)

In re CES 2007 Trust, C.A. No. 2023-0925-SEM (Del. Ch. May 2, 2025) (final report).

Craig Schubiner created a Delaware self-settled trust in 2007, years before the 2014 loan that produced the creditor's claim. It was irrevocable, governed by Delaware law, spendthrift, and administered by Delaware institutional trustees. He barred himself from serving as trustee, retaining only the investment-advisor role, and named his brother as Protector. After a Michigan lender took a nearly $14 million judgment in 2019, it petitioned to void the spendthrift provision or invalidate the trust as a sham. A Senior Magistrate in Chancery recommended dismissal at the pleading stage, finding the trust met every requirement of the Qualified Dispositions in Trust Act and that the retained advisor and protector powers were expressly permitted by 12 Del. C. section 3570(8)(c).

The limit. The dispositive reasoning was entity law rather than trust law: because an LLC member holds no interest in specific LLC property under 6 Del. C. section 18-701, the challenged real-estate transfers happened at the LLC level and were not transfers to or from the trust, and no veil-piercing basis was pled. The magistrate expressly declined to reach timeliness or the merits of the transfers, which remain live in parallel Colorado and Michigan litigation. This is a pleading-stage win, not a final vindication.

TrustCo Bank v. Mathews (Del. Ch. 2015)

TrustCo Bank v. Mathews, C.A. No. 8374-VCP (Del. Ch. Jan. 22, 2015).

Susan Mathews created three Delaware trusts in December 2006 and transferred stock into two of them in January 2007, assertedly as estate planning that predated her loan guaranty. After the guaranteed loan defaulted, the lender took a roughly $2.3 million deficiency judgment and sued in Delaware in March 2013 to unwind the transfers as fraudulent conveyances. On partial summary judgment the Court of Chancery held those claims time-barred.

The limit. This one is barely a DAPT case. The win came from laches and the limitations period, not from the Qualified Dispositions in Trust Act - the court declined to reach the Act at all, and noted that Mathews's retained control presented a disputed fact question unsuitable for summary judgment. The ruling was also without prejudice to claims based on other transfers. A creditor who had sued three years earlier would have had the merits heard.

What This Page Does Not Claim

Two limits are worth stating plainly, because a comparison that overstates its case invites the obvious rebuttal.

Section 548(e) is not a DAPT-only provision. It reaches transfers to self-settled trusts generally, and an offshore trust is a self-settled trust. Anyone who tells you the ten-year reach-back stops at the water's edge is misreading the statute. The difference between the two structures on this point is enforcement, not text: a U.S. court can order a domestic trustee to turn assets over and expect that order to be obeyed, while it cannot compel a licensed foreign trustee, and Cook Islands courts do not enforce U.S. judgments. That jurisdictional separation is the whole design of a Cook Islands Trust. We set that comparison out in full in Cook Islands Trust versus DAPT.

These are decisions, not a batting average. Several are trial-level or fact-bound - Mortensen is a bankruptcy court decision, Huckaby a district court order on partial summary judgment, Magliarditi a preliminary injunction, Kilker unpublished and not citable as precedent in California. Each is included for what it shows about a mechanism, not as a headcount. We record the wins on the same terms, above.

A DAPT is not useless, and nothing here says otherwise. Every case below involves a structure that was tested by a creditor, a bankruptcy trustee or a divorcing spouse. Most DAPTs are never tested at all, and for a settlor whose realistic downside is remote that may be a rational bet. What the record shows is that the protection is conditional on the forum - which matters most for the people who need it most.

Nothing here is a prediction about your case. These are summaries of what particular courts did on particular facts. Additional entries will be added as they are reviewed, and any that cut the other way will be recorded too.

If You Are Considering a Domestic Trust

None of this makes a DAPT useless. It makes its protection conditional in a way that is worth understanding before you rely on it, particularly if bankruptcy is a realistic possibility rather than a remote one. The questions worth asking are which court is likely to decide any future dispute, whether that court is bound by the statute the trust depends on, and what remains of the structure if it is not. A hybrid structure does not resolve the issue where the trust is functionally self-settled.

If you want a candid read on whether a domestic structure fits your exposure, or whether it does not, talk to our attorneys.

This article is provided for general educational purposes and does not constitute legal advice. Reading it does not create an attorney-client relationship. Asset protection planning depends on your individual circumstances, and you should consult a qualified attorney before acting. Blake Harris Law, The Offshore Asset Protection Law Firm. Attorney Advertising.