It just takes one lawsuit that exceeds the limits of your liability policy, or involves an allegation not covered by your liability insurance, and your personal assets are at risk — exposed to the creditor seeking full recovery for the loss.
And while it may seem easier to instead simply transfer the asset(s) to someone else, and avoid the formality of a trust altogether, there are dangers in doing so. It more than likely constitutes a fraudulent conveyance, which is specifically prohibited by law. The law doesn’t allow you to “hide the ball,” but it does allow you to make careful plans for your assets before any claims arise.
In DAPT, you can remove the assets from your personal possession — where they may be exposed for creditors to snatch — by transferring them to a specialized irrevocable trust, with a third-party trustee, such as a bank, accountant, or professional trustee. By doing so, your assets will be beyond creditors’ reach, even if challenged in court. The farther you are removed from the trustee in terms of a familial or business relationship, the more likely your trust will not be viewed as simply a masked extension of yourself, which would prevent the protection of your assets by a court challenge.
Although you are giving up direct personal ownership to a trust you cannot change, you can still legally retain some level of rights to receive trust income and even principal, according to a support or discretionary standard. Further, although you are giving away immediate control of the assets to someone else as trustee, you may still maintain the power to direct (but not consent to or veto) your trustee’s investment decisions; to veto (but not direct or approve) distribution decisions; and to remove and appoint trustees and trust advisors.