A Court Win for Domestic Asset Protection Trusts

In a rare ruling, a Delaware court upheld a self-settled asset protection trust. Here’s what this means for high-net-worth families, and why Omni Legacy Law recommends asset protection trusts in favorable jurisdictions like South Dakota.

If you’ve built significant wealth, protecting it for your family—and from potential creditors—is more important than ever. One tool often discussed is the domestic asset protection trust (DAPT). But historically, courts haven’t been very favorable to these trusts. That’s what makes a recent Delaware court case so important.

In In the Matter of the CES 2007 Trust, the Delaware Court of Chancery upheld a self- settled trust designed to protect a settlor’s assets from a large creditor judgment. While this is a rare win for a DAPT, it offers a valuable lesson: when structured correctly, asset protection trusts can work.