When Alaska, Delaware and Nevada modified their trust statutes to legalize a spendthrift clause in a self-settled trust, they created a significant departure in American law. Up until that time, the only effective way to create a self-settled spendthrift trust was to form it offshore, outside of U.S. jurisdiction.
These states also eliminated the rule against perpetuities. This antiquated rule limits the duration of a trust to the life of some person living at the time the trust is created, plus 21 years. As a result, the Alaska, Delaware and Nevada asset protection trusts can continue indefinitely.
Missouri has a more limited exception to the rule that makes a self-settled spendthrift trust invalid. In that state, the exception does not apply where the trustor is the sole beneficiary of either the income or the principal, or the beneficiary of a fixed portion of the income or the principal. This exception has existed since the 1980s. However, because of the limited nature of the exception, Missouri has not been considered a significant option for opening an asset protection trust.