Unlocking the Power of Asset Protection Trusts A Game Changing History

Go ahead and like this video as well as subscribe to our YouTube channel. Today, we’re going to talk about asset protection trusts and how we got to where we are today. This is a brief overview of the history and development of asset protection trusts.

Historically, you have not been able to set up a trust for your own benefit—known as a self-settled trust—fund it with your own assets, and have those assets be protected from creditors, lawsuits, divorcing claims, and other types of legal risks. The only way to accomplish this type of asset protection was if someone else, a third party, set up a trust for your benefit, funded it with assets, and then it would be protected from any type of creditor claims.

However, all of this changed back in the 1980s when the Cook Islands, a small Polynesian country off the coast of New Zealand, passed the first self-settled asset protection laws in the world. This changed the trust industry everywhere. Shortly thereafter, states here in the U.S. started passing similar asset protection trust statutes that allowed people to set up self-settled trusts for the purpose of creditor protection.

Today, Nevada and South Dakota are recognized as the premier asset protection trust jurisdictions in the country, with South Dakota being the premier trust jurisdiction overall due to its privacy laws, asset protection statutes, tax laws, and dynastic planning. We can discuss that in more detail in another video.

Here’s something to keep in mind: even though other states are passing asset protection trust statutes, that doesn’t mean all things are equal in these jurisdictions. So, even if you’re located in a state that does have asset protection trust statutes, it might still be beneficial—likely is beneficial—to take a look at South Dakota and figure out if it’s going to be more advantageous for you, because it probably is.

While different states continue to pass laws, it’s really two states, South Dakota and Nevada, that continue to modernize their trust laws, with South Dakota being at the forefront of that push.