Asset Protection Trusts are Approaching
While this posting doesn't exactly relate to North Carolina law, one of NC's neighboring states, Tennessee, has adopted legislation to allow Domestic Asset Protection Trusts (DAPTs). Being licensed in TN as well as NC, this is of interest to me, and it may be of interest to NC residents who want to establish a DAPT, but would prefer to "stay close to home."
With the addition of TN, 10 states now allow DAPTs, but TN is the only one in the Southeast. The TN law refers to their version of the DAPT as the "Tennessee Investment Services Trust" (TIST), hoping to avoid the negative connotation the term "Asset Protection Trust" has for some.
DAPTs, including TN's TIST, allow a grantor to contribute assets to a trust in which the grantor is also a beneficiary, while keeping those assets protected from creditors. There are certain exceptions, of course, and all of the statutory requirements must be met for the protection to be effective.
Tennessee has also extended their rule against perpetuities to 360 years, allowing the TIST (and other TN trusts) to last for many generations. North Carolina's rule against perpetuities has also been repealed this year - are NC DAPTs next on the horizon? It certainly would be a way to keep trust dollars in the state and perhaps attract investment funds from other states.
