A Fresh Look at State Asset Protection Trust Statutes
This Article examines the rise of state asset protection trust (“APT”) statutes. It juxtaposes two apparently contrary trends: an increase in formal legal responses suggesting that the trusts created under these statutes are likely to have at best limited enforceability and an increase in the adoption and use of these statutes. After summarizing the legal background out of which these two trends arise, I analyze the characteristics of the states that have chosen to adopt them to date and conclude that the size of a state is less predictive of adoption than broader social and economic characteristics of the populace.
This Article closes with a discussion of why the use of the statutes is growing. In general, the limited litigation, coupled with apparently increasing enactments and usage, suggests the statutes are producing something useful that investment professionals can sell.
Albert E. Cinelli Professor of Law and Co-director of the Charles Evans Gerber Transactional Studies Center, Columbia Law School.