The Mortensen opinion provided the first judicial interpretation of Bankruptcy Code Sec. 548(e) as applied to a transfer to an asset protection trust (“APT”). Since that Opinion was released, many practitioners have asked me whether APTs “work.” My unsatisfying lawyerly answer is, “Maybe, depending on the circumstances.” The chart below gives the general circumstances in which APTs should be effective or not (but keep in mind the general rule that “general rules are generally inapplicable”):
via Easy Chart Regarding Effectiveness Of Asset Protection Trusts – Forbes.