Wyoming Qualified Spendthrift Trusts (DAPTs)

Wyoming Asset Protection Trusts — Complete Guide + Bespoke Drafting

I draft Wyoming Qualified Spendthrift Trusts (self-settled domestic asset protection trusts) for founders, professionals, and investors who need real shelter from future personal-creditor claims. This comprehensive guide explains exactly how the Wyoming statute works, what the qualified transfer requires, how to fund the trust, international signing options, and how I personally handle every detail from drafting through trustee onboarding.

0%

Wyoming state income tax on trust earnings (no tax)

4 yrs

Wyoming voidable-transfer look-back for pre-existing creditors

10 yrs

Federal bankruptcy clawback (§548(e)) for actual-intent transfers

100%

Privacy—trust not publicly recorded unless you choose to file a certificate

Wyoming Asset Protection Trust Overview

What is a Wyoming Qualified Spendthrift Trust?

A Wyoming Qualified Spendthrift Trust (QST) is a self-settled domestic asset protection trust (DAPT) with Wyoming governing law, a Wyoming trustee (individual resident or trust company/private family trust company), spendthrift clause, and discretionary distributions. When you fund it properly before trouble starts and stay solvent, future personal creditors cannot force distributions.

Who I build these for

Physicians, agency owners, crypto/real-estate investors, pre-liquidity founders with lumpy balance sheets, and professionals in high-liability fields. Most already use Wyoming holding LLCs and want another layer sitting above the LLC stack for personal-creditor protection.

What it does NOT do

It does not erase current lawsuits, unpaid child support, alimony obligations, or fraudulent transfers. Wyoming's statute protects you from future claimants—not existing liabilities. I will turn away anyone trying to hide an existing liability or dodge a current creditor.

Yellow flag before we start:

I screen each matter for pending litigation, tax liens, judgments, or insolvency. If anything is active, we pause and bring litigation counsel or a CPA into the conversation before a single document is drafted. Asset protection trusts must be funded when you are solvent and not facing imminent claims.

Decision Tree: Is a Wyoming Asset Protection Trust Right for You?

Good fit if you:

  • Have significant assets ($500K+) you want to protect from future creditors
  • Work in a high-liability profession (medicine, real estate development, business ownership)
  • Are solvent and have no pending litigation or claims
  • Want to combine asset protection with estate planning
  • Are willing to give up some direct control in exchange for protection
  • Already use or plan to use Wyoming LLCs for your holdings

NOT a good fit if you:

  • Have active lawsuits, judgments, or claims against you
  • Owe child support, alimony, or have support obligations
  • Are insolvent or near insolvency
  • Need to hide assets from tax authorities (illegal)
  • Made recent large transfers that could be deemed fraudulent
  • Need immediate liquidity and cannot afford to tie up assets

How a Wyoming Qualified Spendthrift Trust Works

Key Statutory Requirements

Wyoming DAPT statute (Wyo. Stat. §§4-10-5XX) requires:

  • Wyoming law governing the trust
  • Wyoming trustee (individual WY resident or WY trust company/PTC)
  • Trust administration and records maintained in Wyoming
  • Spendthrift clause protecting beneficiaries
  • "Qualified transfer" with affidavit from settlor

Distribution Control

You remain a discretionary beneficiary, but an independent Distribution Director (or the trustee) approves distributions in writing. You cannot demand distributions. I normally structure age-based releases for remainder beneficiaries (e.g., at age 25 or 30, customizable to your goals).

Grantor vs. Non-Grantor Tax Posture

Default build is a grantor trust: every dollar of trust income flows through to your personal 1040, and you keep filing a single return—simple and clean. I can convert to non-grantor for specific SALT planning or treaty situations, but that adds CPA coordination and complexity.

Look-Back Periods & Voidable Transfers

Critical timing windows I plan around:
  • 4 years under Wyoming's Uniform Voidable Transfer Act (or 1 year from discovery for pre-existing creditors with provable claims)
  • 10 years under Bankruptcy Code §548(e)—a bankruptcy trustee can claw back DAPT transfers made within 10 years if done with actual intent to hinder, delay, or defraud creditors

That's why funding timing, solvency documentation, and lawful-source attestations matter so much. I document everything to counter future challenges.

Exception Creditors (What the Trust Won't Shield)

Wyoming law carves out certain claims that can still reach trust assets:

Insurance still matters:

Even with a Wyoming trust, I recommend maintaining adequate personal liability insurance (umbrella policy of $1M or more). Many trustees require this as a condition of serving. It shows good faith and reduces the risk of exception-creditor challenges.

Retained Powers & Safe Harbors

You can retain certain powers without destroying the asset protection:

Veto Power

You can retain the right to veto any proposed distribution (including distributions to yourself). This gives you a defensive control without triggering domination concerns.

Investment Direction

Within Wyoming safe harbors, you may retain investment advisory powers—directing how trust assets are invested—without being deemed to "control" the trust for creditor purposes.

5% Unitrust Withdrawal

You can retain a limited annual withdrawal right (e.g., up to 5% of trust value per year, subject to notice/timing and liquidity). This preserves some access while maintaining protection.

Funding the Trust & Qualified Transfer Affidavit (QTA)

Funding a Wyoming asset protection trust is a multi-step process that requires careful documentation. The centerpiece is the Qualified Transfer Affidavit (QTA)—a statutory sworn statement you sign attesting to solvency, absence of fraud, lawful source of funds, and other critical facts.

Three-Step Funding Process

Step 1: Identify Assets

First, I work with you to map every asset you want to transfer:

  • Cash & brokerage accounts
  • Membership interests in LLCs
  • Stock in C-corps or S-corps
  • Intellectual property (trademarks, patents, copyrights)
  • Real property (usually titled into a WY holding LLC first, then LLC interests transferred to the trust)
  • Digital assets (crypto wallets, NFTs, domain names)

For each asset, I prepare the correct assignment or transfer document.

Step 2: Execute the Qualified Transfer Affidavit (QTA)

You sign a Wyoming Qualified Transfer Affidavit attesting to:

  • Solvency: You have more assets than liabilities
  • No known lawsuits: No pending or threatened litigation
  • No intent to defraud: Transfer is not to dodge a specific creditor
  • Lawful source of funds: Assets were acquired legally
  • Child/spousal support: Whether you owe or pay support
  • Insurance representation: (Optional) that you maintain liability coverage

If needed, I'll attach supporting proof: balance sheet, insurance declaration, CPA solvency letter.

Step 3: Retitle or Assign Assets

Once the QTA is signed, I execute the transfers:

  • LLCs: Assignment of Membership Interest + updated member ledger and capital account
  • Corporations: Stock powers, stock ledgers, new certificates (if issued)
  • Cash: Wire to the trustee or to a WY LLC owned by the trust
  • Crypto: Internal custody memo describing wallet addresses and transfer of control
  • Real estate: Deed to WY LLC, then LLC interest to trust (avoids triggering due-on-sale clauses)

Qualified Transfer Affidavit Deep Dive

What each QTA representation means:
  • Solvency: I'll ask for a current balance sheet or CPA letter showing assets exceed debts. If you're close to the line, we discuss whether to delay funding or reduce the transfer amount.
  • No litigation/administrative proceedings: Disclose any pending suits, IRS audits, regulatory investigations, or demand letters. If something is active, we pause.
  • No intent to defraud: This is the anti-fraud core. If you have a specific known creditor and you're transferring to avoid paying them, that's fraudulent—I won't draft it.
  • Lawful source: Assets must come from legal activities. I need to know the origin (business income, investment gains, inheritance, etc.).
  • Child support / alimony: If you pay support, I disclose it in the affidavit. The trust won't shield those obligations, per Wyoming statute.

Insurance Covenant (Optional but Recommended)

Insurance representation in the QTA:

Some trustees require that you maintain a personal umbrella liability policy (e.g., $1M or equal to the fair market value of qualified transfers, whichever is less). This is not a Wyoming statutory requirement, but it's a conservative asset-protection practice.

Why trustees want this: It shows good faith, demonstrates you're not "judgment-proof," and reduces the risk of tort-claimant exception challenges.

My approach: I draft the insurance representation as optional/flexible. If you don't carry umbrella coverage, I can adjust the language, tailor it to actual coverage you maintain, or remove it if the trustee agrees. Let me know what coverage you have, and I'll structure it accordingly.

Funding Checklist & Documentation

For each funding, I prepare:

Notarization & Signing Inside or Outside the United States

Many of my clients live abroad or travel frequently. Wyoming trusts and Qualified Transfer Affidavits require notarization, but you have four flexible execution options depending on where you are when you sign.

Option 1: U.S. Notary (Default)

Sign in Wyoming or your home state before a traditional notary public. I supply the acknowledgment block and any jurat language the trustee or county clerk expects. This is the simplest path if you're in the United States.

Option 2: U.S. Consular Notarization

If you live abroad, visit a U.S. Embassy or Consulate. U.S. consular officers can notarize your trust and QTA exactly as a U.S. notary would. No apostille required. I'll adjust the notary block to show the city/country where you sign (e.g., "U.S. Consulate, Madrid, Spain").

I prefer this route for international clients because it's straightforward and universally accepted by U.S. recorders and trustees.

Option 3: Local Notary + Apostille

Sign before a civil-law notary in your country (e.g., Spain, Germany, France) and obtain an apostille under the Hague Convention. The apostille certifies the notary's authority so U.S. entities accept the document.

I supply a dual-jurisdiction acknowledgment block: "State/Province of ___, Country of ___." After notarization, you (or the notary) obtain the apostille from the competent authority in your country (e.g., Colegio Notarial in Spain).

Timeline: Apostille can take 1-4 weeks depending on the country. Factor this into your schedule.

Option 4: Remote Online Notarization (RON)

When permitted, I coordinate with a U.S. RON platform (e.g., Notarize, Proof). You appear on a video call, verify your identity, and sign electronically. The notary is commissioned in a U.S. state that authorizes RON (Wyoming and many other states allow this).

Acceptance: Most trustees and recorders accept RON notarizations. I confirm with your trustee in advance. This is the fastest option for international clients who want to avoid embassy visits.

Notary Block Language & Venue

How I handle the notary venue:

The standard notary acknowledgment reads "State of ___, County of ___." For international signings, I modify it to:

"State/Commonwealth/Province of __________, Country of __________"

I add a parenthetical note: "Acknowledgment may be taken before a U.S. notary, a U.S. consular officer, or a foreign notary with apostille under the Hague Convention."

You (or the notary) fill in the actual location when signing. The notary completes their certificate, and if using a foreign notary, you obtain the apostille afterward.

Step-by-Step for Each Path

Path 1 (U.S. Notary):

  1. I send you the trust agreement and QTA with notary blocks
  2. You visit a notary in your state
  3. Notary completes acknowledgment and affixes seal
  4. You return signed/notarized originals to me or the trustee

Path 2 (U.S. Consular):

  1. I send you the documents with consular-friendly notary blocks
  2. You schedule an appointment at the nearest U.S. Embassy/Consulate
  3. Bring your U.S. passport and any required ID
  4. Consular officer notarizes on the spot (fee typically $50 per signature)
  5. No apostille needed—return to me or trustee

Path 3 (Local Notary + Apostille):

  1. I send documents with dual-jurisdiction notary block
  2. You visit a local notary (notario, civil-law notary)
  3. Notary completes the certificate in the format they use
  4. You (or notary) obtain apostille from competent authority (e.g., Ministry of Foreign Affairs, Colegio Notarial)
  5. Return apostilled documents to me or trustee

Path 4 (Remote Online Notarization):

  1. I coordinate with a RON provider and send you the platform link
  2. You schedule a video session (typically 15-30 minutes)
  3. Verify your identity on camera (driver's license, passport)
  4. Review and e-sign documents on screen
  5. Notary applies electronic seal and certificate
  6. You receive notarized PDF instantly; I confirm acceptance with trustee

Trust vs. LLC (and Why I Usually Stack Both)

Clients often ask: "Should I use a Wyoming trust or a Wyoming LLC?" The answer: both. They protect different things and work best together.

Wyoming Asset Protection Trust Wyoming LLC
Primary Shield Blocks personal creditors from forcing distributions out of the trust Blocks asset-level liabilities from hitting you personally (reverse veil)
Control Trustee/Distribution Director has discretion; you retain veto rights or limited powers You (or manager) manage operations; easy to show banks and business partners
Privacy Not recorded publicly (unless I record a certificate of trust for real estate or banking) Articles of Organization filed with Wyoming Secretary of State; can use registered agent for privacy
Tax Treatment Grantor trust (default): income flows to your 1040; Non-grantor: separate trust return Disregarded entity (SMLLC) or partnership/corporation tax treatment
Best Use Owning passive assets, holding company interests, receiving profits/distributions, estate planning Operating companies, property-specific SPVs, brokerage accounts, active business
Liability Exposure Low—trust doesn't conduct business or create operational liabilities Moderate—LLC may have operational liabilities (tenants, contracts, torts)

Typical Structure I Build: Trust + LLC Stack

Recommended layered structure:

Settlor (You)Wyoming Qualified Spendthrift TrustWyoming Holding LLC (manager-managed by trustee) → Asset LLCs (real estate SPVs, trading LLCs, intellectual property holding companies)

How it works:

  • You create and fund the trust with a Qualified Transfer
  • The trust owns 100% of a Wyoming Holding LLC
  • The Holding LLC is manager-managed; the trustee acts as manager (or appoints one)
  • The Holding LLC owns membership interests in multiple Asset LLCs (each Asset LLC owns a specific property, brokerage account, or business line)

Benefits of this stack:

  • Personal-creditor protection: Your creditors can't force distributions from the trust
  • Asset-level shields: If one Asset LLC gets sued (e.g., tenant slip-and-fall), the liability stays in that LLC and doesn't reach other LLCs or the Holding LLC
  • Operational flexibility: The Holding LLC can open bank accounts, sign contracts, and manage the Asset LLCs without exposing the trust
  • Privacy: The trust is private; only the Holding LLC and Asset LLCs are publicly filed
  • Estate planning: Trust controls succession and distributions to heirs; LLCs handle day-to-day operations

When to Use ONLY a Trust (No LLC)

When to Use ONLY an LLC (No Trust)

When to Stack Trust + LLC (Recommended for High-Net-Worth)

Example: Real Estate Investor Structure

Client: Owns 5 rental properties in different states, $3M total value, plus $500K in a brokerage account.

Structure I build:

  • Wyoming Qualified Spendthrift Trust (holds everything)
  • Wyoming Holding LLC (owned by trust, managed by trustee)
  • 5 Asset LLCs (one per property: CA Rental LLC, TX Rental LLC, etc.; each owned by Holding LLC)
  • Brokerage account titled in the name of the Holding LLC or a separate Investment LLC

Result: If a tenant sues the CA Rental LLC, only that LLC's assets (the CA property) are at risk. The other 4 properties, the brokerage account, and the Holding LLC are insulated. If the client gets sued personally (e.g., car accident), the creditor can't force distributions from the trust.

Transparent Packages & Pricing (Billed at $240/hour Base)

I bill all work at $240 per hour in six-minute increments. The packages below show typical attorney time for each deliverable. Most trusts fall within these ranges; if your matter is more complex (multiple trustees, non-grantor tax planning, cross-border issues), I'll give you a revised estimate upfront.

Core Trust Drafting

$720 / ~3 hours
  • Wyoming Qualified Spendthrift Trust drafted to your goals
  • Spendthrift clause, discretionary distributions, Wyoming situs
  • Distribution standards & age-based releases (customizable)
  • Protector / Distribution Director structure
  • Grantor-trust tax language (or non-grantor if needed)
  • Certificate of Trust for banking/recording
  • One round of revisions included
Start Drafting

Premium Package

$2,160 / ~9 hours
  • Everything in Standard Package, plus:
  • International execution support (consular, apostille, or RON)
  • Dual-jurisdiction notary block & signing instructions
  • Trustee onboarding & acceptance coordination
  • Wyoming Holding LLC formation (if stacking trust + LLC)
  • One year of included annual review/funding updates
Get Started

À La Carte Services (Beyond Packages)

Funding & QTA Only

$360–$720 (~1.5–3 hours)

If you already have a trust and need help with a new funding round: Qualified Transfer Affidavit, assignments, trustee receipts, updated schedules.

International Execution

$240–$480 (~1–2 hours)

Consular or apostille-ready notary instructions, dual-jurisdiction acknowledgment language, RON coordination, country-specific guidance.

Trustee Onboarding

$240–$360 (~1–1.5 hours)

Liaison with Wyoming individual trustee or corporate/PTC trustee; minutes/resolutions; acceptance of trusteeship; trustee education.

LLC Layering Bundle

$400+ per LLC

Wyoming Holding LLC + Asset LLCs aligned to the trust structure; articles, operating agreements, manager/consent docs, bank letters. (Re-uses patterns from my Wyoming LLC service.)

Trust Amendment

$240–$480 (~1–2 hours)

Change beneficiaries, update distribution standards, add/remove protectors, adjust age triggers. Includes updated Certificate of Trust if needed.

Ongoing Counsel (As-Needed)

$240/hour

Annual reviews, new asset funding, distribution approval memos, successor trustee events, tax coordination with your CPA, compliance. Billed in 6-minute increments.

How billing works:

I track time in six-minute increments (0.1 hour = $24). At the end of each month, I send an itemized invoice showing date, task description, time, and amount. You pay by check, wire, or Zelle. For package deals, I invoice 50% upfront and 50% on delivery of drafts.

Estimates are good-faith projections. If your matter is straightforward and takes less time, you pay less. If it's more complex (e.g., non-grantor tax planning, multi-jurisdictional assets, contested creditor issues), I'll revise the estimate and get your approval before proceeding.

Frequently Asked Questions

Yes. Wyoming law allows you to remain a discretionary beneficiary. An independent trustee or Distribution Director decides if and when to distribute. I also give you veto power so no one can force money out against your wishes. You cannot demand distributions (that would destroy the protection), but you can receive them at the trustee's discretion.

No. You can live anywhere in the world. The trust simply needs a Wyoming trustee and Wyoming situs (recordkeeping and administration). I routinely work with clients in California, New York, Texas, and internationally (Europe, Asia, Latin America). The key is that the trust is administered in Wyoming, not you.

Wyoming's statute exempts certain claims, including child support and spousal support. The trust won't shield those obligations—they always take priority. If you pay support, I disclose it in the Qualified Transfer Affidavit. The trust is designed to protect you from future creditors (lawsuits, business debts), not family support obligations.

The trust protects you from personal creditors—people suing you individually cannot force distributions out of the trust. An LLC protects individual assets from operational liabilities—if the LLC gets sued, your personal assets are safe. I usually stack them together: Trust owns Holding LLC, Holding LLC owns Asset LLCs. That way you get both personal-creditor protection and asset-level shields.

Absolutely. I have clients in Spain, Germany, UK, Singapore, and elsewhere. Execution logistics (apostille vs. consular notarization) are the main consideration. I coordinate with your CPA or tax advisor to ensure U.S. tax reporting (Form 3520, etc.) is handled correctly. Non-U.S. persons may also need to consider tax treaties and reporting in their home country.

If the funding was proper, yes—usually. The Bankruptcy Code §548(e) allows a bankruptcy trustee to claw back DAPT transfers made within 10 years if there was actual intent to hinder, delay, or defraud creditors. I document solvency, lawful purpose, and absence of fraud to counter that risk. If you fund when solvent, with no imminent claims, and wait out the look-back periods, the trust should withstand bankruptcy challenges.

Grantor trust (default): All trust income is reported on your personal 1040. You pay the income tax; the trust doesn't file a separate return. Simpler and cleaner for most clients. Non-grantor trust: The trust files its own return (Form 1041) and pays tax at trust rates (which are higher). Used for specific SALT planning, irrevocable life insurance trusts, or treaty situations. I can draft either way; grantor is the norm for asset protection trusts.

The trust is irrevocable (can't be revoked entirely), but I build in amendment powers for non-material changes: updating beneficiaries, adjusting distribution ages, adding/removing protectors, changing administrative provisions. Material changes that affect the asset-protection or tax status require more care. I draft amendments for $240–$480 depending on complexity.

You have three main options: (1) Individual Wyoming resident—a trusted friend or advisor who lives in WY; (2) Wyoming trust company—a licensed corporate trustee; (3) Wyoming Private Family Trust Company (PTC)—you form your own WY entity to act as trustee (requires more setup but gives you more control). I can introduce you to trustees or help you form a PTC if that fits your goals.

No problem. The trust remains governed by Wyoming law and administered in Wyoming regardless of where you live. That's one of the benefits—you're not tied to Wyoming residency. Just keep your trustee informed of your current address for distributions and communications.

Yes, but I usually structure it differently for liability reasons. Instead of the trust owning the property directly, I create a Wyoming Holding LLC (owned by the trust), and the Holding LLC owns state-specific Asset LLCs (e.g., "California Rental Property LLC"). Each Asset LLC holds one property. This way, if a tenant sues, the liability stays in that LLC and doesn't reach the trust or other properties.

Drafting the trust takes 1-2 weeks. Funding (QTA, assignments, trustee onboarding) takes another 2-4 weeks depending on asset complexity and notarization logistics. If you're signing internationally (apostille route), add 2-4 weeks for apostille processing. Total timeline: 4-8 weeks from intake to fully funded trust. I can expedite if you have urgent deadlines.

Annual review (I recommend scheduling a call each year to review assets, distributions, and any life changes). Tax reporting if non-grantor (Form 1041). Updating the asset schedule when you add new assets. Trustee fees (if using a corporate trustee; varies by trustee). Optional: periodic solvency updates and insurance verification. I offer ongoing counsel at $240/hr for these tasks.

Yes. I build in remainder beneficiary provisions (e.g., on your death, 60% to your son, 20% to your daughter, 20% to your spouse—customizable). I can structure age-based releases (e.g., your son gets control at age 25) or keep assets in continuing trust for asset protection and tax planning. The trust combines asset protection during your life with estate planning for after.

No direct conversion. A revocable living trust offers no asset protection (you control it fully, so creditors can reach it). To get protection, I draft a new irrevocable Wyoming QST and you transfer assets from your revocable trust to the new trust via Qualified Transfer. Your revocable trust can remain in place for other assets or be wound down—depends on your overall plan.

Get Started — Tell Me About Your Project

I usually respond within one business day. Everything you send stays confidential under attorney-client privilege once we begin the engagement.

Contact & Next Steps

Email

owner@terms.law

I respond within one business day. Email is the best way to send documents, background materials, or detailed questions.

Phone Consultation

Book a 30-minute Zoom or phone call to discuss your situation:

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Mailing Address

Sergei Tokmakov, Esq.
[Your office address]
[City, State ZIP]

For signed originals, notarized documents, or formal correspondence.

What Happens After You Contact Me?

  1. Initial Consultation (30 min, usually free): We discuss your goals, asset profile, creditor exposure, and whether a Wyoming trust is the right fit.
  2. Engagement Letter & Retainer: If we move forward, I send an engagement letter outlining scope and fees. You pay a retainer (typically 50% of estimated package cost).
  3. Intake & Due Diligence: I send a detailed intake questionnaire covering assets, beneficiaries, trustee preferences, and risk factors. You provide supporting docs (balance sheet, insurance declarations, corporate records for LLCs/corps).
  4. Drafting (1-2 weeks): I draft the trust agreement, Qualified Transfer Affidavit, Certificate of Trust, and any LLC/assignment templates.
  5. Review & Revisions: You review drafts; I revise based on your feedback. One round of revisions is included in the package price.
  6. Execution & Notarization: You sign the trust and QTA (in the U.S., at a consulate, or via RON). I coordinate with the notary/apostille process if international.
  7. Funding: I prepare assignment documents for each asset (LLCs, stock, real estate, etc.). You execute assignments; I coordinate with the trustee to receive and acknowledge each transfer.
  8. Trustee Onboarding: If you don't already have a trustee, I introduce you to options (individual, corporate, or PTC). The trustee signs acceptance; I deliver all trust documents and schedules.
  9. Closing & Ongoing: You receive a complete closing binder (trust, QTA, assignments, trustee acceptance, certificates). I'm available for annual reviews, new fundings, and amendments at $240/hr.
Timeline Summary:
  • Week 1-2: Consultation, engagement, intake
  • Week 2-3: Drafting and review
  • Week 3-4: Execution and notarization (add 2-4 weeks if apostille required)
  • Week 4-6: Funding and trustee onboarding
  • Total: 4-8 weeks from start to fully funded trust (expedited timelines available)

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