Historically, you could not create a trust, put your own money into it, be a beneficiary of that trust, and still protect those assets from your own creditors. This was considered against public policy. However, starting with Alaska in 1997, 17 states have passed laws allowing exactly this: the Domestic Asset Protection Trust (DAPT).
How a DAPT Works
You create an irrevocable trust in a DAPT state (like Nevada, South Dakota, or Delaware) and fund it with your assets. You name an independent trustee (usually a trust company in that state) to manage the assets. You are a discretionary beneficiary, meaning the trustee can distribute money to you, but you cannot demand it.
Important
The Creditor Shield
Because you cannot legally force the trustee to give you money, your creditors cannot force the trustee to give them money either. The assets are shielded from future lawsuits, malpractice claims, or bankruptcy.
The Catch: Fraudulent Transfer
A DAPT only protects against future, unforeseen creditors. If you are already being sued, or know a lawsuit is imminent, transferring assets into a DAPT is considered a 'fraudulent transfer.' A judge will pierce the trust and seize the assets.