Domestic Asset Protection Trust (DAPT): A self-settled trust in which funds are held on a discretionary basis by a third-party Trustee with the Grantor typically being a beneficiary of the trust. These trusts are most commonly set up in order to mitigate taxes and penetration by a future creditor, divorcing spouse, lawsuit, or bankruptcy. Various state statutes and case law govern the effectiveness of self-settled DAPT trusts.
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