Each year, nationally known estate planning and asset protection attorney Steve Oshins publishes a chart ranking the various states that allow self-settled spendthrift trusts. Recently, he released the 3rd Annual Domestic Asset Protection Trust State Rankings Chart, which, notably, for the first time since the chart’s inception, assigns numerical rankings to each state.
This latest edition of the chart distinguishes the DAPT states pursuant to the following factors—each with their own assigned weight: spouse/ child support exception creditors (30%); preexisting torts exception creditors/ other exception creditors (30%); statute of limitations (future creditor) (10%); statute of limitations (preexisting creditor) (10%); state income tax (10%); and reputation/ fraudulent transfer standard/ other adjustments (10%). Regarding the chart’s methodology, in an interview with this blog about a prior version of the rankings chart, Mr. Oshins explained: “I put the most weight on the exception creditors that can pierce through that state’s asset protection trusts. The chart puts a special focus on whether a divorcing spouse can pierce through it and also whether a preexisting tort creditor can pierce through it.”
Due to its lack of exception creditors and shortest statute of limitations, Nevada continues its hold on the chart’s number 1 spot. Nonetheless, there has been a shake-up at the number 2 and 3 positions with Alaska and South Dakota flipping spots. Indeed, the rankings chart has South Dakota slightly edging ahead of Alaska, with the former receiving a total score of 92 and the latter trailing behind by two points. South Dakota’s rise is likely attributed to a couple of recent developments, including the removal of its preexisting tort creditor exception statute and a reduction in its statute of limitations period. Delaware occupies the number 4 spot with a total score of 82. Rounding out the top five is Tennessee—with a total score of 79. Making its debut on the rankings chart, Virginia steps in at number 12.
The complete rankings and analysis can be found at: http://www.oshins.com/images/DAPT_Rankings.pdf. Mr. Oshins will be discussing the rankings chart at The Trust Advisor’s webinar on asset protection trusts on Tuesday, June 5th, from 2:00pm – 3:00pm ET.