American College of Trust & Estate Council



COMPARISON

OF THE

DOMESTIC ASSET PROTECTION STATUTES

Updated Through October 2007

Prepared by David G. Shaftel

© David G. Shaftel, 2007. All Rights Reserved.

The initial sources for the drafting of this chart were comparisons done by Richard Nenno of Wilmington Trust Company and Douglas Blattmachr of Alaska Trust Company. This comparison adds five states and changes and doubles the subjects. The following attorneys generously reviewed and edited their state’s subjects for accuracy: Marc A. Chorney, Stan C. Kent (Colorado); Richard G. Bacon (Delaware); Larry P. Katzenstein (Missouri); Layne Rushforth (Nevada); Richard B. Kells (Oklahoma); Mary Louise Kennedy (Rhode Island); John H. Raforth (South Dakota); Bryan Howard (Tennessee); Thomas Christensen, Jr. (Utah); and Robert H. Leonard (Wyoming).

| |What requirements must trust meet to come within protection of statute? |1 |7 |14 |

| |May a revocable trust be used for asset protection? |1 |7 |14 |

| |Has the state legislature consistently supported DAPTs and related estate planning by continued amendments? |1 |7 |14 |

| |What contacts with state are suggested or required to establish situs? |1 |8 |15 |

| |What interests in principal and income may settlor retain? |2 |8 |15 |

| |What is trustee's distribution authority? |2 |8 |15 |

| |What powers may settlor retain? |2 |8 |15 |

| |Who must serve as trustee to come within protection of statute? |2 |9 |16 |

| |May non-qualified trustees serve? |2 |9 |16 |

| |May trust have distribution advisor, investment advisor, or trust protector? |3 |9 |16 |

| |Are fraudulent transfers excepted from coverage? |3 |9 |16 |

| |Fraudulent transfer action: burden of proof and statute of limitations. |3 |10 |17 |

| |Does statute provide an exception (no asset protection) for a child support claim? |4 |10 |17 |

| |Does the statute provide an exception (no asset protection) for alimony? |4 |10 |17 |

| |Does statute provide an exception (no asset protection) for property division upon divorce? |4 |10 |17 |

| |Does statute provide an exception (no asset protection) for tort claims? |4 |11 |17 |

| |Does statute provide other express exceptions (no asset protection)? |4 |11 |18 |

| |Does statute prohibit any claim for forced heirship, legitime or elective share? |4 |11 |18 |

| |Are there provisions for moving trust to state and making it subject to statute? |4 |11 |18 |

| |Does statute provide that spendthrift clause is transfer restriction described in Section 541(c)(2) of the Bankruptcy |4 |11 |19 |

| |Code? | | | |

| |Does statute provide that trustee automatically ceases to act if court has jurisdiction and determines that law of trust |5 |11 |19 |

| |does not apply? | | | |

| |Does statute provide that express/implied understandings regarding distributions to settlor are invalid? |5 |11 |19 |

| |Does statute provide protection for attorneys, trustees, and others involved in creation and administration of trust? |5 |11 |19 |

| |Does statute authorize a beneficiary to use or occupy real property or intangible personal property owned by trust, if in |5 |12 |19 |

| |accordance with trustee's discretion? | | | |

| |Is a non-settlor beneficiary's interest protected from property division at divorce? |5 |12 |19 |

| |Are due diligence procedures required by statute? |5 |12 |19 |

| |Is the trustee given a lien against trust assets for costs and fees incurred to defend the trust? |5 |12 |20 |

| |Is there statutory authority supporting a trust's non-contestability clause even if probable causes exists for contest? |5 |12 |20 |

| |Is the trustee given "decanting" authority to modify the trust? |6 |12 |20 |

| |What is allowable duration of trusts? |6 |12 |20 |

| |Does state assert income tax against DAPTs formed by non-resident settlors? |6 |13 |20 |

| |Have state limited partnership and LLC statutes been amended to provide maximum creditor protection? |6 |13 |20 |

| |What is the procedure and time period for a trustee to provide an accounting and be discharged from liability? |6 |13 |20 |

| |Citation: |Citation: |Citation: |Citation: |

| |Alaska Stat. § 34.40.110 |Col. Rev. Stat. §§ 38-10-111 |Del. Code Ann |Mo. Rev. Stat. §§ 456.5-505 |

| | | |tit. 12 §§ 3570-3576 | |

| |Effective Date: April 2,1997 |Effective Date: 1861 |Effective Date: July 1, 1997 |Effective Date: 1989 |

|  |URL: |URL: |URL: |URL: |

| | | | | |

| | | | | |

|1. What requirements must trust meet to come within |Trust instrument must: (1) be |In trust, limited to future creditors. |Trust instrument must: (1) be |Trust instrument must: (1) be |

|protection of statute? |irrevocable; (2) expressly state AK law | |irrevocable; (2) expressly state that DE |irrevocable; (2) contain a spendthrift |

| |governs validity, construction, and | |law governs validity, construction, and |clause. |

| |admin-istration of trust (unless trust is| |admin-istration of trust (unless trust is| |

| |being transferred to AK trustee from | |being transferred to DE trustee from | |

| |non-AK trustee); (3) contain spendthrift | |non-DE trustee); (3) contain spendthrift | |

| |clause. | |clause. | |

|2. May a revocable trust be used for asset protection? |No |No |No |No |

|3. Has the state legislature consistently supported |Yes, amendments enacted in: 2006, 2004, |No amendments |Yes, amendments enacted in: 2007, 2006, |Amendments enacted in 2004 |

|DAPTs and related estate planning by continued |2003, 2001, 2000, and 1998. | |2005, 2003, 2002, 2001, 2000, and 1998 | |

|amendments? | | | | |

|4. What contacts with state are suggested or required |Suggested: (1) some or all of trust |Not addressed by statute. |Required: (1) some or all of trust assets|Principal place of business or residence |

|to establish situs? |assets deposited in state; (2) AK trustee| |deposited in state; (2) DE trustee whose |of trustee in designated jurisdiction, or|

| |whose powers include (a) maintaining | |powers include (a) maintaining records |presence of all or part of the |

| |records (can be non-exclusive), | |(can be nonexclusive), (b) preparing or |administration in designated |

| |(b) preparing or arranging for the | |arranging for the preparation of income |jurisdiction; statute includes procedure |

| |preparation of income tax returns (can be| |tax returns; (3) or, otherwise materially|for transfer of principal place of |

| |non-exclusive); (3) part or all of the | |participates in the admin-istration of |business. |

| |administra-tion occurs in state, | |the trust. |RSMo § 456.1-108 |

| |including maintenance of records. | | | |

| | | | | |

| | | | | |

|5. What interests in principal and income may settlor |Settlor may retain interests in: (1) CRT;|Not addressed by statute. |Settlor may retain interests in: (1) |Settlor may be one of a class of |

|retain? |(2) total-return trust; (3) GRAT or GRUT;| |current income; (2) CRT; (3) up to 5% |beneficiaries of a trust discretionary as|

| |(4) QPRT; (5) IRA. | |interest in total-return trust; (4) GRAT |to income or principal. |

| | | |or GRUT; (5) QPRT; (6) qualified annuity |RSMo § 456.5-505.3 |

| | | |interest; (7) ability to be reimbursed | |

| | | |for income taxes attributable to trust; | |

| | | |and (8) the ability to have debts, | |

| | | |expenses and taxes of the settlor’s | |

| | | |estate paid from the trust. | |

|6. What is trustee's distribution authority? |Absolute discretion |Not addressed by statute. |(1) Discretion; or (2) pursuant to a |Not addressed by statute. |

| | | |standard. | |

|7. What powers may settlor retain? |Settlor may retain: (1) power to veto |Not addressed by statute. |Settlor may retain: (1) power to veto |None—see answer to 6 |

| |distri-butions; (2) non-general | |distributions; | |

| |testamentary power of appointment; and | |(2) non-general testamentary power of | |

| |(3) right to appoint trust protector of | |appointment; and | |

| |trustee advisor. | |(3) power to replace trustee/advisor with| |

| | | |nonrelated/nonsubor-dinate party. | |

|8. Who must serve as trustee to come within protection |Alaska trustee not required, but |Not addressed by statute. |Resident individual or corporation whose |Not addressed by statute. |

|of statute? |suggested to establish situs. Resident | |activities are subject to supervision by | |

| |individual or trust company or bank that | |Delaware Bank Commissioner, FDIC, | |

| |possesses trust powers and has principal | |Comptroller of Currency, or Office of | |

| |place of business in Alaska. | |Thrift Supervision. | |

|9. May non-qualified trustees serve? |Yes |Not addressed by statute. |Yes, as a co-trustee. |Not addressed by statute. |

|10. May trust have distribution advisor, investment |Yes. Trust may have trust protector (who |Not addressed by statute. |Yes. Trust may have one or more advisors |Not addressed by statute. |

|advisor, or trust protector? |must be disinterested third party) and | |(other than trustor) who may remove and | |

| |trustee advisor. Settlor may be advisor | |appoint qualified trustees or trust | |

| |if does not have trustee power over | |advisors or who have authority to direct,| |

| |discretionary distributions. | |consent to, or disapprove distributions | |

| | | |from trust. Trust may have invest-ment | |

| | | |advisor, including trustor. The term | |

| | | |“advisor” includes a protector. | |

|11. Are fraudulent transfers excepted from coverage? |Yes. Alaska has not adopted Uniform |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |

| |Fraudulent Transfer Act. Alaska statute |applies and sets aside transfers with |applies and sets aside transfers with |applies and sets aside transfers with |

| |sets aside transfers made with intent to |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |

| |defraud. |transfers made with constructive |transfers made with constructive |transfers made with constructive |

| | |fraudulent intent. |fraudulent intent. However, future |fraudulent intent. |

| | | |creditors may set aside transfer only if | |

| | | |transfer made with intent to defraud. | |

|12. Fraudulent transfer action: burden of proof and |Burden not addressed by statute. |Clear and convincing evidence. |Clear and convincing evidence. |Clear and convincing evidence. |

|statute of limitations. |Existing creditors: Four years after |Existing creditors and future creditors: |Existing creditors: Four years after |Existing creditors and future creditors: |

| |transfer, or one year after transfer was |Four years after transfer, or one year |transfer, or one year after transfer was |Four years after transfer, or one year |

| |or could reasonably have been discovered,|after transfer was or could reasonably |or could reasonably have been discovered |after transfer was or could reasonably |

| |but future creditor must establish claim |have been discovered if claim based upon |if claim based upon intent to hinder, |have been discovered if claim based upon |

| |within four years after transfer. |intent to hinder, delay or defraud. Four|delay or defraud. Four years after |intent to hinder, delay or defraud. Four|

| |Future creditors: Four years after |years after transfer if claim based upon |transfer if claim based upon constructive|years after transfer if claim based upon |

| |transfer. |constructive fraud. |fraud. |constructive fraud. |

| | | |Future creditors: Four years after | |

| | | |transfer. | |

|13. Does statute provide an exception (no asset |Yes, if settlor was 30 days or more in |No |Yes |Yes |

|protection) for a child support claim? |default of mak-ing payment at time of | | |RSMo § 456.5-503.2 |

| |transfer of assets to trust. | | | |

|14. Does the statute provide an exception (no asset |No |No |Yes, if ex-spouse was married to settlor |Yes |

|protection) for alimony? | | |before or on date of transfer of assets |RSMo § 456.5-503.2 |

| | | |to trust. | |

|15. Does statute provide an exception (no asset |Yes, if assets were transferred to trust |No |Yes, if ex-spouse was married to settlor |No |

|protection) for property division upon divorce? |during or less than 30 days prior to | |before or on date of transfer of assets | |

| |marriage. Otherwise, assets are | |to trust. Otherwise, assets are | |

| |protected. | |protected. | |

|16. Does statute provide an exception (no asset |No |No |Yes, for claims that arise as a result of|No |

|protection) for tort claims? | | |death, personal injury, or property | |

| | | |damage occurring before or on the date of| |

| | | |transfer. | |

|17. Does statute provide other express exceptions (no |No |No |No |Yes if another governing law supercedes. |

|asset protection)? | | | | |

|18. Does statute prohibit any claim for forced heirship,|No |No |Yes |No |

|legitime or elective share? | | | | |

|19. Are there provisions for moving trust to state and |Yes |No |Yes |No |

|making it subject to statute? | | | | |

|20. Does statute provide that spendthrift clause is |Yes |No |Yes |No |

|transfer restriction described in Section 541(c)(2) of | | | | |

|the Bankruptcy Code? | | | | |

|21. Does statute provide that trustee automatically |No |No |Yes |No |

|ceases to act if court has jurisdiction and determines | | | | |

|that law of trust does not apply? | | | | |

|22. Does statute provide that express/implied |Yes |No |Yes |No |

|understandings regarding distributions to settlor are | | | | |

|invalid? | | | | |

|23. Does statute provide protection for attorneys, |Yes, and also provides protection for |No |Yes |No |

|trustees, and others involved in creation and |funding limited partnerships and LLCs. | | | |

|administration of trust? | | | | |

|24. Does statute authorize a beneficiary to use or |Yes |No |No, except for QPRT residence. |No |

|occupy real property or intangible personal property | | | | |

|owned by trust, if in accordance with trustee's | | | | |

|discretion? | | | | |

|25. Is a non-settlor beneficiary's interest protected |Yes, and may not be considered in |Increases in value of separate property |Yes, but may be considered in property |Yes, but may be considered in property |

|from property division at divorce? |property division. |after marriage are marital property. |division. |division. |

|26. Are due diligence procedures required by statute? |Yes; affidavit required. |No |No |No |

|27. Is the trustee given a lien against trust assets for|Yes |No |Yes |No |

|costs and fees incurred to defend the trust? | | | | |

|28. Is there statutory authority supporting a trust's |Yes |No |Yes |No |

|non-contest-ability clause even if probable cause exists| | | | |

|for contest? | | | | |

|29. Is the trustee given "decanting" authority to modify|Yes |No |Yes |No |

|the trust? | | | | |

|30. What is allowable duration of trusts? |Up to 1,000 years |Up to 1,000 years |Abolished for personal property (which |Abolished; generally applicable only |

| | | |includes LLC and LP interests). 110 years|after August 28, 2001. |

| | | |for real property. |RSMo § 456.025.1 |

|31. Does state assert income tax against DAPTs formed by|No |Yes |No. However, does impose its income tax |Yes, if from sources within Missouri. |

|non-resident settlors? | | |upon trusts that accumulate income for |Probably no if from marketable |

| | | |Delaware residents. |securities. |

|32. Have state limited partnership and LLC statutes been|Yes; charging order is only remedy. |Yes, charging order is only remedy. |Yes, charging order is only remedy. |Yes, charging order is only remedy. |

|amended to provide maximum creditor protection? | | | | |

|33. What is the procedure and time period for a trustee |(1) Trustee petition and court discharge;|Six months after trustee provides report |Trustee filing and court discharge. |One year after trustee provides report |

|to provide an accounting and be discharged from |or (2) six months after trustee provides |that adequately discloses claims, and |Discharge occurs two years after delivery|that adequately discloses claims. |

|liability? |report that adequately discloses claims. |shows termination of the trust |of statement that discloses the facts | |

| | |relationship between the trustee and the |giving rise to the claim. (Accountings do| |

| | |beneficiary. |not have res judicata effect in Delaware | |

| | | |except as to matters actually contested | |

| | | |in the accounting proceeding.) | |

| |Citation: |Citation: |Citation: |Citation: |

| |Nev. Rev. Stat. §§ 166.010-166.170 |Okla. Stat. tit. 31 § 11, |R.I. Gen Laws |S.D. Codified Laws |

| | |et seq. |§§ 18-9.2-1 - 18-9.2-7 |§§ 55-16-1 - 55-16-17 |

| |Effective Date: Oct. 1, 1999 |Effective Date: Nov. 1, 2004 |Effective Date: July 1, 1999 |Effective Date: March 2, 2005 |

|  |URL: |URL: |URL: |URL: |

| | | | | |

| | | | | |

|1. What requirements must trust meet to come within |Trust instrument must: (1) be |Trust instrument may be revocable or |Trust instrument must: (1) be |Trust instrument must: (1) be |

|protection of statute? |irrevocable; (2) all or part of corpus of|irrevocable. Trust instrument must: |irrevocable; (2) expressly state R.I. Law|irrevocable; (2) expressly state that |

| |trust must be located in Nevada, domicile|(1) expressly state Oklahoma law governs;|governs validity, construction, and |S.D. law governs validity, construction, |

| |of settlor must be in Nevada, or trust |(2) have qualified benefi-ciaries |administration of trust; (3) contain |and administration of trust (unless trust|

| |instru-ment must appoint Nevada trustee; |(ancestors or descendants of grantor, |spendthrift clause. |is being transferred to S.D. trustee from|

| |and |charities, or trusts for such | |non-S.D. trustee); (3) contain |

| |(3) distributions to settlor must be |beneficiaries); (3) recite that income | |spendthrift clause; specifically refer to|

| |approved by someone other than the |subject to income tax laws of Oklahoma; | |S.D. Act. |

| |settlor. |(4) limited to $1,000,000 of assets plus | | |

| | |growth. | | |

|2. May a revocable trust be used for asset protection?|No |Yes. Settlor may revoke or amend trust |No |No |

| | |and take back assets. No court or other | | |

| | |judicial body may compel such revocation | | |

| | |or amendment. | | |

|3. Has the state legislature consistently supported |Yes. The 2007 legislature approved minor|Yes, amendment enacted in 2005. |Yes, amendment enacted in 2007. |No amendments |

|DAPTs and related estate planning by continued |amendments. | | | |

|amendments? | | | | |

|4. What contacts with state are suggested or required |Required: (1) all or part of assets are |Required: (1) Oklahoma trustee; (2) |Required: (1) some or all of trust assets|Suggested: (1) some or all of trust |

|to establish situs? |in state; (2) Nevada trustee whose powers|majority of value of assets comprised of |deposited in state; (2) R.I. trustee |assets deposited in state; (2) S.D. |

| |include: |Oklahoma assets. |whose powers include: (a) maintaining |trustee whose powers include |

| |(a) maintaining records, (b) preparing | |records (can be non-exclusive), |(a) maintaining records (can be |

| |income tax returns; (3) all or part of | |(b) preparing or arranging for the |non-exclusive), (b) preparing or |

| |administration in state. | |preparation of income tax returns; |arranging for the preparation of income |

| | | |(3) or, otherwise materially participates|tax returns; (3) or otherwise materially |

| | | |in the admin-istration of the trust. |participates in the admin-istration of |

| | | | |the trust. |

|5. What interests in principal and income may settlor |Not addressed by statute. |Irrevocable trusts: not addressed by |Settlor may retain interests in: (1) |Settlor may retain interests in: (1) |

|retain? | |statute. Revocable trusts: see Item 7. |current income; (2) CRT; (3) up to five |current income; (2) CRT; (3) up to 5% |

| | | |percent interest in total return trust; |interest in total-return trust; (4) GRAT |

| | | |QPRT; ability to be reimbursed for income|or GRUT; (5) QPRT. |

| | | |taxes attributable to trust. | |

|6. What is trustee's distribution authority? |Absolute discretion. |Irrevocable trusts: not addressed by |Discretion, or pursuant to a standard. |(1) Absolute discretion; (2) pursuant to |

| | |statute. Revocable trusts: see Item 7. | |an ascertainable standard. |

|7. What powers may settlor retain? |Settlor may retain: (1) power to veto |Irrevocable trusts: not addressed by |Settlor may retain: (1) power to veto |Settlor may retain: (1) power to veto |

| |distributions; and (2) special |statute. Revocable trusts: settlor may |distributions; and (2) special |distribu-tions; (2) non-general |

| |testamentary power of appointment or |revoke or amend. |testamentary power of appointment. |testamentary power of appointment; and |

| |other similar power. | | |(3) power to replace trustee/advisor with|

| | | | |nonrelated/nonsubor-dinate party. |

|8. Who must serve as trustee to come within protection |Resident individual or trust company or |Oklahoma based bank or credit union |Resident individual (other than the |Resident individual or corporation whose |

|of statute? |bank that maintains office in Nevada. |insured by FDIC or NCUA and has place of |transferor) or corporation whose |activities are subject to supervision by |

| | |business in Oklahoma or Oklahoma based |activities are subject to supervision by |S.D. Division of Banking, FDIC, |

| | |trust company chartered under Oklahoma |R.I. Dept. of Business Regulation, FDIC, |Comptroller of Currency, or Office of |

| | |law or nationally chartered. |Comptroller of Currency, or Office of |Thrift Supervision. S.D. trustee |

| | | |Thrift Supervision. |automatically ceases to serve if it fails|

| | | | |to meet these requirements. |

|9. May non-qualified trustees serve? |Yes |Yes |Yes |Yes |

|10. May trust have distribution advisor, investment |Not addressed by statute. |Not addressed by statute. |Yes. Trust may have one or more advisors |Yes. Trust may have one or more advisors |

|advisor, or trust protector? | | |(other than trustor) who may remove and |(other than trustor) who may remove and |

| | | |appoint qualified trustees or trust |appoint qualified trustees or trust |

| | | |advisors or who have authority to direct,|advisors or who have authority to direct,|

| | | |consent to, or disapprove distributions |consent to, or disapprove distributions |

| | | |from trust. Trust may have invest-ment |from trust. Trust may have invest-ment |

| | | |advisor, including trustor. The term |advisor, including trustor. |

| | | |“advisor” includes a protector. | |

|11. Are fraudulent transfers excepted from coverage? |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |

| |applies, and sets aside transfers with |applies, and sets aside transfers with |applies, and sets aside transfers with |applies, and sets aside transfers with |

| |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |

| |transfers made with constructive |transfers made with constructive |transfers made with constructive |transfers made with constructive |

| |fraudulent intent. |fraudulent intent. |fraudulent intent. |fraudulent intent. |

|12. Fraudulent transfer action: burden of proof and |Clear and convincing evidence. |Clear and convincing evidence. |Clear and convincing evidence. |Clear and convincing evidence. |

|statute of limitations. | | | | |

| |Future creditors: |Existing creditors and future creditors: |Existing creditors: Four years after |Existing creditors and future creditors: |

| |Two years after transfer. |Four years after transfer, or one year |transfer, or one year after transfer was |Four years after transfer, or one year |

| | |after transfer was or could reasonably |or could reasonably have been discovered |after transfer was or could reasonably |

| |Existing creditors: |have been discovered if claim based upon |if claim based upon intent to hinder, |have been discovered if claim based upon |

| |Two years after transfer, or, if longer, |intent to hinder, delay or defraud. Four|delay or defraud. Four years after |intent to hinder, delay or defraud. Four|

| |six months after transfer was or could |years after transfer if claim based upon |transfer if claim based upon constructive|years after transfer if claim based upon |

| |reasonably have been discovered if claim |constructive fraud. |fraud. |constructive fraud. |

| |based upon intent to hinder, delay or | | | |

| |defraud (rather than constructive fraud).| |Future creditors: Four years after | |

| |2007 amendment (effective 10/1/2007) | |transfer. | |

| |provides that transfer is deemed | | | |

| |discovered when reflected in a public | | | |

| |record. | | | |

|13. Does statute provide an exception (no asset |No |Yes |Yes, if at the time of transfer a court |Yes |

|protection) for a child support claim? | | |order for child support existed. | |

|14. Does the statute provide an exception (no asset |No |No |Yes, if ex-spouse was married to settlor |Yes, if ex-spouse was married to settlor |

|protection) for alimony? | | |before or on date of transfer of assets |before or on date of transfer of assets |

| | | |to trust. |to trust. |

|15. Does statute provide an exception (no asset |No |No |Yes, if ex-spouse was married to settlor |Yes, if ex-spouse was married to settlor |

|protection) for property division upon divorce? | | |before or on date of transfer of assets |before or on date of transfer of assets |

| | | |to trust. Otherwise, assets are |to trust. Otherwise, assets are |

| | | |protected. |protected. |

|16. Does statute provide an exception (no asset |No |No |Yes, for claims that arise as a result of|Yes, for claims that arise as a result of|

|protection) for tort claims? | | |death, personal injury, or property |death, personal injury, or property |

| | | |damage occurring before or on the date of|damage occur-ring before or on the date |

| | | |transfer. |of transfer. |

|17. Does statute provide other express exceptions (no |No |No |No |No |

|asset protection)? | | | | |

|18. Does statute prohibit any claim for forced heirship,|No |No |No |No |

|legitime or elective share? | | | | |

|19. Are there provisions for moving trust to state and |No |No |No |Yes |

|making it subject to statute? | | | | |

|20. Does statute provide that spendthrift clause is |No |Yes |Yes |Yes |

|transfer restriction described in Section 541(c)(2) of | | | | |

|the Bankruptcy Code? | | | | |

|21. Does statute provide that trustee automatically |No |No |Yes |No |

|ceases to act if court has jurisdiction and determines | | | | |

|that law of trust does not apply? | | | | |

|22. Does statute provide that express/implied |No |No |Yes |Yes |

|understandings regarding distributions to settlor are | | | | |

|invalid? | | | | |

|23. Does statute provide protection for attorneys, |No |No |Yes |Yes |

|trustees, and others involved in creation and | | | | |

|administration of trust? | | | | |

|24. Does statute authorize a beneficiary to use or |No |No |No, except for QPRT residence. |Yes |

|occupy real property or intangible personal property | | | | |

|owned by trust, if in accordance with trustee's | | | | |

|discretion? | | | | |

|25. Is a non-settlor beneficiary's interest protected |Yes, if property is retained in a |No |Yes, but may be considered in property |No |

|from property division at divorce? |spendthrift trust for the beneficiary. | |division. | |

| |Even if not retained in trust, property | | | |

| |received by gift or inheritance is the | | | |

| |beneficiary’s separate property; however,| | | |

| |trust income and assets can be considered| | | |

| |a resource for purposes of determining | | | |

| |alimony and child support. | | | |

|26. Are due diligence procedures required by statute? |No |No |No |No |

|27. Is the trustee given a lien against trust assets for|No |No |Yes |Yes |

|costs and fees incurred to defend the trust? | | | | |

|28. Is there statutory authority supporting a trust's |No |No |No |No |

|non-contestability clause even if probable cause exists | | | | |

|for contest? | | | | |

|29. Is the trustee given "decanting" authority to modify|No |No |No |Yes |

|the trust? | | | | |

|30. What is allowable duration of trusts? |Up to 365 years |Rule against perpetuities. |Abolished rule against perpetuities. |Abolished rule against perpetuities. |

|31. Does state assert income tax against DAPTs formed by|No. Nevada has no state income tax. |Yes |No |No |

|non-resident settlors? | | | | |

|32. Have state limited partnership and LLC statutes been|Yes, charging order is only remedy. |Yes, charging order is only remedy. |Yes, charging order is only remedy. |Yes; charging order is only remedy. |

|amended to provide maximum creditor protection? | | | | |

|33. What is the procedure and time period for a trustee |Trustee petition and court discharge. |Two years after trustee provides report |Trustee application and court discharge. |180 days after trustee provides |

|to provide an accounting and be discharged from | |that adequately discloses claims. | |accounting, or by order of court for |

|liability? | | | |supervised trusts. |

| |Citation: |Citation: |Citation: |

| |Tenn. Code Ann. [to be assigned] |Utah Code Ann. § 25-6-14 |Wyo. Stat. §§ 4-1-505 |

| | | |and 4-10-510 - 523 |

| |Effective Date: |Effective Date: |Effective Date: |

| |July 1, 2007 |December 31, 2003 |July 1, 2007 |

|  |URL: |URL: |URL: |

| | | | |

| | | | |

|1. What requirements must trust meet to come within |Trust instrument must: |Trust instrument must: (1) be |Trust instrument must: (1) state that |

|protection of statute? |(1) be irrevocable; (2) expressly state TN|irrevocable; (2) contain spendthrift |trust is a "qualified spendthrift trust” |

| |law governs validity, construction and |clause. |under § 4-10-510 of Wyoming statutes; |

| |administration of the trust; (3) contain a| |(2) be irrevocable; (3) expressly state |

| |spendthrift clause. | |Wyoming law governs validity, |

| | | |construction and administration of the |

| | | |trust; (4) contain a spendthrift clause; |

| | | |(5) settlor must have personal liability |

| | | |insurance equal to lesser of $1,000,000 |

| | | |or value of trust assets. |

|2. May a revocable trust be used for asset protection?|No |No |No |

|3. Has the state legislature consistently supported |No amendments |No amendments |No amendments |

|DAPTs and related estate planning by continued | | | |

|amendments? | | | |

|4. What contacts with state are suggested or required |Required: (1) some or all of trust assets |Required: (1) Utah trust company; (2) |Required: Wyoming trustee who: (a) |

|to establish situs? |deposited in state; (2) Tennessee trustee |some or all of the assets held in |maintains custody of some or all of trust|

| |whose powers include (a) maintaining |certain types of accounts in state. |assets in state; (b) maintains records |

| |records (can be non-exclu-sive), (b) | |(can be non-exclusive); (c) prepares or |

| |preparing or arranging for the | |arranges for the preparation of income |

| |prepara-tion of income tax returns; (3) | |tax returns; (d) or, otherwise |

| |or, otherwise materially participates in | |materially participates in the |

| |the administration of the trust. | |administration of the trust. |

|5. What interests in principal and income may settlor |Settlor may retain interests in: (1) |Settlor may retain interest in CRT. |Settlor may retain interests in: (1) |

|retain? |current income; (2) CRT; (3) up to 5% | |current income; (2) CRT; (3) up to 5% |

| |interest in total-return trust; (4) QPRT. | |interest in total-return trust; (4) QPRT.|

|6. What is trustee's distribution authority? |(1) Absolute discretion; (2) pursuant to a|(1) Absolute discretion; (2) pursuant to|(1) Absolute discretion; (2) pursuant to |

| |standard. |an ascertainable standard. |a standard. |

|7. What powers may settlor retain? |Settlor may retain: (1) power to veto |Settlor may retain: (1) power to veto |Settlor may retain: |

| |distribu-tions; (2) non-general |distri-butions; (2) testamentary special|(1) power to veto distribu-tions; (2) |

| |testamentary power of appointment; |power of appoint-ment; and (3) power to |inter vivos or testamentary general or |

| |(3) power to replace trustee/advisor with |appoint nonsubordinate |limited power of appoint-ment; (3) power |

| |nonrelated/nonsub-ordinate party; and |advisors/protectors. |to add or remove a trustee, trust |

| |(4) serve as an investment advisor. | |protector, or trust advisor; (4) serve as|

| | | |an investment advisor. |

|8. Who must serve as trustee to come within protection|Resident individual, or is authorized by |Institution authorized to engage in |Resident individual or a person |

|of statute? |Tennessee law to act as a trustee and |trust business in Utah, including Utah |authorized by Wyoming law to act as |

| |whose activities are subject to |depository institutions, non-Utah |trustee or a regulated financial |

| |supervision by the Tennessee Dept. of |depository institutions authorized to do|institution. |

| |Financial Institutions, the FDIC, the |business in Utah, and certain other | |

| |Comptroller of the Currency, or the Office|institutions. | |

| |of Thrift Supervision, or any successor | | |

| |thereto. | | |

|9. May non-qualified trustees serve? |Yes |Yes. Individual co-trustees may serve. |Yes |

|10. May trust have distribution advisor, investment |Yes. Trust may have: |Yes. Trust may have non-subordinate |Yes. Trust may have trust protector and |

|advisor, or trust protector? |(1) advisors who have authority to remove |advisors/protectors who can remove or |trust advisor. |

| |and appoint qualified trustees or trust |appoint trustees; direct, consent to, or| |

| |advisors; (2) advisors who have authority |disapprove distributions; or serve as | |

| |to direct, consent to or disapprove |investment directors. Settlor may be | |

| |distributions from the trust; and |investment director. | |

| |(3) investment advisors. The term | | |

| |"advisor" includes a trust protector. | | |

|11. Are fraudulent transfers excepted from coverage? |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |Yes. Uniform Fraudulent Transfer Act |

| |applies and sets aside transfers with |applies and sets aside transfers with |applies and sets aside transfers with |

| |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |intent to hinder, delay or defraud, and |

| |transfers made with constructive |transfers made with constructive |transfers made with constructive |

| |fraudulent intent. |fraudulent intent. |fraudulent intent. |

|12. Fraudulent transfer action: burden of proof and |Burden not addressed by statute. |Clear and convincing evidence. |Burden not addressed by statute. |

|statute of limitations. | | | |

| |Existing creditors: Four years after |Existing creditors and future |Existing creditors and future creditors: |

| |transfer, or one year after transfer was |creditors: Four years after transfer, |Four years after transfer, or one year |

| |or could reasonably have been discovered |or one year after transfer was or could|after transfer was or could reasonably |

| |if claim based upon intent to hinder, |reasonably have been discovered if |have been discovered if claim based upon |

| |delay or defraud. Four years after |claim based upon intent to hinder, |intent to hinder, delay or defraud. Four |

| |transfer if claim based upon constructive |delay or defraud. Four years after |years after transfer if claim based upon |

| |fraud. |transfer if claim based upon |constructive fraud. |

| | |constructive fraud. | |

| |Future creditors: Four years after | | |

| |transfer. | | |

|13. Does statute provide an exception (no asset |No |Yes |Yes |

|protection) for a child support claim? | | | |

|14. Does the statute provide an exception (no asset |No |Yes |No |

|protection) for alimony? | | | |

|15. Does statute provide an exception (no asset |No |Yes |No |

|protection) for property division upon divorce? | | | |

|16. Does statute provide an exception (no asset |No |Yes, see Item 17, below. |No |

|protection) for tort claims? | | | |

|17. Does statute provide other express exceptions (no |No |Yes: (1) claim is decision or ruling |Yes. (1) Qualified trust property that is |

|asset protection)? | |resulting from judicial, arbitration, |listed upon an application or financial |

| | |mediation, or administrative proceeding|statement used to obtain or maintain |

| | |commenced prior to or within three |credit other than for the benefit of the |

| | |years after trust created; (2) public |qualified spendthrift trust; (2) property |

| | |assistance; (3) taxes; (4) violation of|of a qualified spendthrift trust that was |

| | |certain written representations or |transferred to the trust by a settlor who |

| | |agreements; (5) fraud. |received the property by a fraudulent |

| | | |transfer. |

|18. Does statute prohibit any claim for forced |No |No |No |

|heirship, legitime or elective share? | | | |

|19. Are there provisions for moving trust to state and |Implied, based on a trustee’s power to |Yes |Yes, permits transfer of trust property |

|making it subject to statute? |make contributions to a DAPT. | |from trust created in another |

| | | |juris-diction with similar creditor |

| | | |protection for settlor with creditor |

| | | |protection relating back to date of |

| | | |funding of trust created in other |

| | | |jurisdic-tion. Irrevocable trusts from |

| | | |other states may also elect to become |

| | | |qualified spendthrift trusts if they |

| | | |incorporate law of Wyoming, obtain |

| | | |qualified trustee, and have spendthrift |

| | | |clause. |

| | | | |

|20. Does statute provide that spendthrift clause is |Yes |Yes |Yes |

|transfer restriction described in Section 541(c)(2) of | | | |

|the Bankruptcy Code? | | | |

|21. Does statute provide that trustee automatically |Yes |No |Yes |

|ceases to act if court has jurisdiction and determines | | | |

|that law of trust does not apply? | | | |

|22. Does statute provide that express/implied |Yes |No |No |

|understandings regarding distributions to settlor are | | | |

|invalid? | | | |

|23. Does statute provide protection for attorneys, |Yes |Yes |Yes |

|trustees, and others involved in creation and | | | |

|administration of trust? | | | |

|24. Does statute authorize a beneficiary to use or |Yes |No |No, except for QPRT residence. |

|occupy real property or intangible personal property | | | |

|owned by trust, if in accordance with trustee's | | | |

|discretion? | | | |

|25. Is a non-settlor beneficiary's interest protected |Yes, but may be considered in property |No |Yes, but may be considered in property |

|from property division at divorce? |division. | |division. |

|26. Are due diligence procedures required by statute? |Yes; affidavit required. |No |Yes; affidavit required. |

| | | | |

| | | | |

|27. Is the trustee given a lien against trust assets |Yes |Yes |Yes |

|for costs and fees incurred to defend the trust? | | | |

|28. Is there statutory authority supporting a trust's |No |No |No |

|non-contest-ability clause even if probable cause | | | |

|exists for contest? | | | |

|29. Is the trustee given "decanting" authority to |Yes |No |No, but trust protector may have a similar|

|modify the trust? | | |power. |

|30. What is allowable duration of trusts? |Up to 360 years. |Up to 1,000 years. |Up to 1,000 years, except for real |

| | | |property. |

|31. Does state assert income tax against DAPTs formed |No, if the beneficiaries are nonresidents.|No, except for Utah source income, such|No |

|by non-resident settlors? | |as rental income from Utah real | |

| |If the beneficiaries are residents, a tax |property. | |

| |is levied on dividends and interest. | | |

|32. Have state limited partnership and LLC statutes |Yes for LLCs; charging order is only |Yes, charging order is only remedy. |Yes; charging order is exclusive remedy. |

|been amended to provide maximum creditor protection? |remedy. | | |

| | | | |

| |No for LPs. | | |

|33. What is the procedure and time period for a trustee|One year after trustee provides report |Six months after trustee provides |Two years after trustee provides report |

|to provide an accounting and be discharged from |that adequately discloses claims. |report that adequately discloses |that adequately discloses claims. |

|liability? | |claims. | |

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