Introduction: A Wyoming Domestic Asset Protection Trust (“WAPT”) is a self-settled, irrevocable trust in which you establish the trust as the “grantor” and are also a beneficiary. You may have other beneficiaries as well. “Irrevocable” is a term defined by the statute and does not have a common sense meaning. We discuss the legally defined term “irrevocable” in this article.
Goals: The primary goal of a WAPT is to deny creditors access to the assets you place in trust. In this respect, the provisions of Wyoming law and, in particular, the Wyoming Uniform Trust Code (“WUTC”) apply. These requirements are not negotiable, but the WUTC was drafted to allow you maximum flexibility over what the trust does with your assets. Remember, through the private trust company, you retain, in large part, control over the assets you place in trust.
The secondary goal most grantors have is to minimize their federal and state income and estate taxes. This is the subject of another article on this web site and is far more complex and requires an understanding of the applicable tax codes. You should seek independent advice on taxes.
WAPT Irrevocability Provisions. Your trust must be irrevocable; however, your retaining the following rights and powers does not make your trust irrevocable:
You must also take into consideration the tax effects of these powers, which may require a different approach to their inclusion in your WAPT. This requires another discussion, but again, the powers and rights you retain have an impact that must be flushed out with your counsel as you develop your strategy. You need good advice. You need an attorney to discuss the impact of your decisions with you.
These exceptions are the most general we find in our planning, but the list is not exhaustive. As you can see, the common sense understanding of the term “irrevocable” does not square with the statutory definition, which allows you a lot of discretion in what you do with your WAPT.
Good luck out there.