Alabama Domestic Asset Protection Trust (DAPT)
A DAPT is an irrevocable, self-settled trust that holds assets for your benefit while shielding them from future creditors. Alabama recognizes DAPTs under its Uniform Trust Code — with specific drafting requirements and timing rules.
These are the questions that matter most when you’re thinking about an Alabama DAPT.
What is an Alabama DAPT?
A self-settled irrevocable trust: you set it up for your own benefit, but the trust — not you personally — owns the assets, which is what creates the creditor shield.
- Irrevocable once funded — the structure is what creates the shield.
- Self-settled — you can still benefit from the trust during your life.
- Independent trustee required — the trustee has discretion over distributions.
- Spendthrift provisions built in.
- Authorized under the Alabama Uniform Trust Code.
- Trust — not you — legally owns the assets.
What does a DAPT protect against?
A properly funded DAPT generally protects against future creditor claims, malpractice judgments, business liabilities, and lawsuits that arise after the funding.
It generally does not protect against claims that already existed when the trust was funded — transferring assets to a DAPT during a known dispute is treated as a fraudulent transfer.
How is a DAPT different from a MAPT?
Both are irrevocable. They serve different purposes — and the right one depends on what you’re actually trying to protect against.
| What it’s designed to do | Alabama DAPT | MAPT |
|---|---|---|
| Designed to help shield assets from future creditors and lawsuits. | ||
| Built for professionals, business owners, and those with liability exposure. | ||
| You can still benefit from trust assets. | ||
| Holds assets outside Medicaid’s countable resources. | ||
| Built for long-term care planning. | ||
| You generally give up direct benefit of the principal. | ||
| Carries a five-year look-back from funding. |
When does a DAPT actually fit?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on whether a DAPT fits your exposure.
How Brent helps you
- Walks you through whether a DAPT actually fits your liability exposure
- Drafts the trust under the Alabama Uniform Trust Code with the right structure
- Names an independent trustee who can serve effectively
- Coordinates the DAPT with your other estate planning so the pieces fit together
