A new law went into effect July 1, called the Domestic Asset Protection Trust Statute (referred to here in Mississippi as the Qualified Disposition in Trust Act). Mississippi joins fourteen other states in allowing you to move assets into an irrevocable trust and make them unavailable to third-party creditors. That gives you protection for those assets, making it a key part of tax planning and creditor protection planning.

If you’re sued or have collections after you, anything you’ve successfully moved into a domestic asset protection trust is off-limits to third parties.

Here are the three key components required to establish the domestic asset protection trust:

1) You must have a million dollars of general liability insurance in place.

2) If a professional, you also have to carry a million dollars of professional liability insurance.

3) You can’t be the trustee.

Although you can’t be the trustee, you still are permitted to control who the trustee is (the trustee has to be a Mississippi resident) and where the assets are invested. You can remove and replace trustees. You can also veto distributions that the trustee wants to make.

The domestic asset protection trust is useful to people with family or long-term assets they want to protect, or people who have acquired a lot of personal assets and want to take some off the table.

With the exception of a fraudulent transfer, this trust will reliably protect your assets, making it a powerful new tool for tax planning, liability protection, and estate-planning purposes.

For more information about this new protection trust statute and to find out how it could help your situation, contact us today!

~Ronald Morton