Can I set up a self-settled asset protection trust under Pennsylvania law?

No. Pennsylvania does not have a statute that authorizes self-settled asset protection trusts, often called DAPTs. Instead, asset protection in the state is constructed using a combination of more limited legal tools. Residents who specifically want a Domestic Asset Protection Trust must look to the laws of other states, such as Nevada, Delaware, or South Dakota, while being careful to avoid voidable-transaction claims. Learn more about Pennsylvania irrevocable trusts.

How does being married help protect my property from creditors in Pennsylvania?

In Pennsylvania, spouses can hold both real estate and personal property as tenants by the entireties. This specific form of ownership provides a layer of protection because the property is generally shielded from the individual creditors of just one spouse. This makes it a foundational tool for married couples looking to secure their shared assets against separate liabilities. Learn more about Pennsylvania wills.

Are my retirement savings safe from creditors in Pennsylvania?

Yes. Pennsylvania provides protection for retirement savings, including IRAs and ERISA-qualified accounts. These funds are generally protected from creditors both within the context of a bankruptcy proceeding and outside of it. This ensures that money set aside for retirement remains available for its intended purpose regardless of most other financial claims or legal judgments. Learn more about Pennsylvania wills.

Does forming an LLC provide asset protection in Pennsylvania?

Yes, forming a Limited Liability Company (LLC) offers specific protections. In Pennsylvania, even a single-member LLC provides what is known as charging-order protection. For those seeking even more robust safeguards, multi-member LLCs go further in protecting assets. These structures help separate personal liabilities from the assets held within the business entity. Learn more about Pennsylvania business succession planning.

PA Asset Protection Overview

By Sean Quinlan, Esq. · Updated January 15, 2025

Pennsylvania does not authorize self-settled asset protection trusts (no PA DAPT statute). Asset protection here is built from a stack of more limited tools.

Tenancy by entireties

Pennsylvania spouses can hold real estate and personal property as tenants by the entireties — protected from individual creditors of either spouse.

Retirement accounts

IRAs and ERISA-qualified accounts are protected from creditors in Pennsylvania bankruptcy and outside it.

LLCs

Pennsylvania single-member LLCs offer charging-order protection. Multi-member LLCs go further.

Out-of-state DAPTs

Nevada, Delaware, South Dakota DAPTs are available to PA residents — with proper care to avoid PA voidable-transaction claims.

Frequently asked

Common questions

Disclaimer

This article is general information about Pennsylvania law as of the update date above. It is not legal advice for your situation and does not create an attorney-client relationship. For advice on your specific facts, please schedule a consultation.

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