Seventeen states currently allow self-settled spendthrift trusts, meaning the person who funds the trust can also be a beneficiary while keeping the assets out of reach of most creditors. These arrangements are usually called Domestic Asset Protection Trusts, or DAPTs. Everywhere else, traditional common law still applies: if you create a trust for your own benefit, your creditors can reach it.
The 17 DAPT States
As of 2026, the states with DAPT statutes are:
- Alaska
- Delaware
- Hawaii
- Michigan
- Mississippi
- Missouri
- Nevada
- New Hampshire
- Ohio
- Oklahoma
- Rhode Island
- South Dakota
- Tennessee
- Utah
- Virginia
- West Virginia
- Wyoming
Alaska opened the door in 1997, letting both residents and non-residents shield assets by placing them in an irrevocable trust administered in the state.1Justia. Alaska Statutes 34.40.110 – Restricting Transfers of Trust Interests The other 16 states followed with their own variations.
What Every DAPT State Requires
The specific rules differ, but a few requirements show up in every DAPT jurisdiction:
- The trust must be irrevocable. You cannot keep the power to revoke or terminate it unilaterally.
- At least some trust administration must happen inside the state’s borders. In practice this means using a qualified in-state trustee.
- The trustee cannot be the creator. Most DAPT states require either an individual resident of that state or a corporate trustee licensed to operate there.
- Most states require an affidavit of solvency confirming that the transfer won’t leave the creator unable to pay existing debts.
A family member can often stay involved through a co-trustee arrangement, but the qualified in-state trustee is the one who makes the trust eligible for the state’s protections.
Look-Back Periods Vary by State
The sharpest difference among DAPT states is how long creditors have to challenge a transfer into the trust. Once that window closes, assets are generally beyond reach.
Nevada has the shortest window and is one of the most popular DAPT jurisdictions as a result. Existing creditors have two years from the date of transfer, or six months from when they discover it, whichever is later. Creditors whose claims arise after the transfer also have two years.2Nevada Legislature. Nevada Revised Statutes 166.170 – Limitation of Actions With Respect to Transfer of Property to Trust
Delaware gives creditors with post-transfer claims four years to sue a qualified trust, and pre-existing creditors fall under a separate framework under the state’s voidable transactions law.3Justia. Delaware Code Title 12 3572 – Avoidance of Qualified Dispositions South Dakota requires transfers to qualify under its Chapter 55-16 procedures, including the use of a qualified trustee. The remaining DAPT states fall between two and four years depending on the jurisdiction.
These windows interact with the Uniform Voidable Transactions Act, adopted by most states, which generally gives creditors four years from the date of transfer to argue the transfer was made to hinder, delay, or defraud them. The further in advance of any financial trouble a trust is funded, the stronger the protection.
The Risk If You Live Outside a DAPT State
Nothing stops a resident of a non-DAPT state from setting up a trust in Nevada, South Dakota, or any of the other 15. Every DAPT state allows non-residents to create trusts there. The problem is what happens when a creditor sues.
If a creditor brings an action in the creator’s home state and that state has no DAPT statute, the home-state court may apply its own law, which treats self-settled spendthrift trusts as unenforceable. Bankruptcy courts raise a sharper version of the same problem because they have jurisdiction over assets located anywhere in the country. This is the single biggest unresolved question in asset protection law, and the case law is not yet settled. A non-resident creating a DAPT is making a bet that has not been fully tested. Discovering that a DAPT won’t hold up only after a creditor challenge can be worse than never having created one.
Creditors Who Get Through Anyway
Even in a DAPT state, and even after the look-back period has closed, certain creditors can reach trust assets:
- A beneficiary’s child, spouse, or former spouse with a support or alimony judgment. Some states limit this to trust income, others allow access to principal.
- The IRS, which can attach a federal tax lien to a beneficiary’s interest regardless of state-law protections.4Internal Revenue Service. 5.17.2 Federal Tax Liens
- Judgment creditors who provided services for the protection of a beneficiary’s interest in the trust itself.
- Other state and federal government claims, such as Medicaid recovery or criminal restitution, depending on the jurisdiction.
Child support is the most commonly invoked exception, and trustees who ignore valid support orders face personal liability.
If You Don’t Need a Self-Settled Trust
The 17-state list only matters for trusts the creator funds for their own benefit. A third-party spendthrift trust, where one person creates a trust for someone else, is enforceable in virtually every U.S. jurisdiction. The Uniform Trust Code, adopted in whole or in part by a majority of states, confirms that a valid spendthrift provision blocks both the beneficiary’s voluntary transfers and creditors’ involuntary ones. A simple statement in the trust document that the beneficiary’s interest is “held subject to a spendthrift trust” is enough.
Some states build the protection directly into statute. New York automatically restricts a beneficiary’s ability to transfer their right to trust income unless the trust document grants that power.5New York State Senate. New York Estates, Powers and Trusts Law 7-1-5 – When Trust Interest Inalienable; Exception California shields a beneficiary’s income interest from creditors and money judgments until funds actually leave the trust. So if the goal is protecting someone else, your home state almost certainly allows it. The 17-state restriction only comes into play when you’re trying to protect yourself.
Choosing a State
Among the 17 DAPT jurisdictions, the practical choice usually comes down to three factors: the length of the look-back period, the strictness of exception creditor rules, and the cost and availability of qualified trustees. Nevada’s two-year window is the most aggressive. Delaware and South Dakota have long-established trust industries and deep benches of corporate trustees. Alaska, as the first state to enact a DAPT statute, has the longest statutory track record.
Residents of the other 16 DAPT states can generally use their home state’s statute without the cross-border uncertainty that complicates things for everyone else. Residents of the 33 states without DAPT laws face a harder calculation, and that calculation is best made with a lawyer who handles asset protection and has looked at the specific creditors, assets, and timeline involved.