[ Estate Planning · Asset Protection Trust ]
What you've built,
set behind a wall.
[ The Instrument ]
An irrevocable trust, drafted with intention.
An asset protection trust is an irrevocable structure that places certain assets beyond the reach of future creditors. It is not for everyone. It is for the surgeon, the contractor, the founder, the landowner, the family with real exposure that the rest of the plan cannot answer.
Tennessee is one of a small number of states with a domestic asset protection trust statute, the Tennessee Investment Services Trust Act. We draft to it carefully, in coordination with the rest of the family's plan.
[ How it works ]
Separation of legal title from use.
When an asset is contributed to a properly drafted irrevocable trust, the legal title passes to the trustee. The settlor retains certain limited interests, but the asset itself is no longer reachable by the settlor's future personal creditors.
Tennessee's TIST statute permits the settlor to be a discretionary beneficiary of the trust without losing the protection, provided the structure and timing are right. The drafting is technical. The discipline is in the timing.
[ Tradeoffs ]
What you give up.
Irrevocability is the price of the protection. You cannot take back what you contribute. You cannot serve as your own trustee in any meaningful sense. You give up direct control in exchange for a wall the law respects.
- Irrevocability. The trust cannot be unwound at will.
- Limited control. Distributions are at the trustee's discretion, within the trust's terms.
- Gift tax considerations. Contributions are usually gifts for tax purposes and need to be reported and structured.
- Fraudulent transfer risk. Contributions made after a creditor's claim is foreseeable can be unwound. The trust must be funded ahead of trouble, not after it.
[ Distinctions ]
Not a Medicaid trust. Not a revocable trust.
A general asset protection trust shelters from creditors. A Medicaid Asset Protection Trust shelters from TennCare recovery. The two address different problems and have different drafting and timing requirements.
A revocable living trust does neither. It is a probate-avoidance and incapacity tool, and it is transparent to creditors because the settlor can take it back.
[ Who it serves ]
Who an APT actually fits.
[ Professionals ]
Liability exposure.
Physicians, surgeons, attorneys, and other professionals with personal liability tail risk that insurance will not fully answer.
[ Owners ]
Closely held businesses.
Founders and owners with personal guarantees, contractor exposure, or assets concentrated alongside operating risk.
[ Families ]
Substantial estates.
Larger Tennessee estates where shielding a portion of the balance sheet from future, unknown claims is prudent.
[ Pricing ]
Engagement-based, disclosed at consultation.
Asset protection trusts are bespoke. The fee depends on the asset mix, the funding scope, and the gift tax reporting. We provide a written engagement letter with the figure before any drafting begins.
[ Questions ]
What clients usually ask.
No. A contribution made when a claim is already reasonably foreseeable can be unwound as a fraudulent transfer. The trust must be funded in advance of trouble.
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