Table of contents for Asset protection strategies / Alexander A. Bove, Jr., Melissa Langa, editors.

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Chapter 1
A Closer Look at U.S. Asset Protection Trusts 1
Elizabeth M. Schurig	Amy P. Jetel
Background and Current Trends 1
The Uniform Fraudulent Transfer Act 3
Domestic Venue Asset Protection Legislation 5
The Alaska Trusts Act 5
The Delaware Qualified Dispositions in Trust Act 10
The Spendthrift Trust Act of Nevada 13
The Rhode Island Qualified Dispositions in Trust Act 14
The Utah Self-Settled Spendthrift Trust 18
Oklahoma: The Newest Domestic Venue? 20
Domestic Venue Asset Protection Trust Vulnerabilities 22
Judicial Vulnerabilities 22
Constitutional Vulnerabilities 25
Conclusion 33
Chapter 2
Anatomy of a Fraudulent Transfer 47
Jay D. Adkisson 
Christopher Riser
Overarching Concepts 48
Creditor vs. Transferee 48
The UFTA Expands Creditors' Remedies 49
Manipulating Certainty 49
What Statute of Limitations? 49
No Judgment Required 50
Transactions with Insiders Are Suspect 50
Transfers by Insolvent Debtors Are Suspect 51
Transfers Lacking Value Are Suspect 51
What Is Not Covered by the UFTA 52
Valid Liens 53
Assets Exempt Under State Law 53
Tenancy by the Entireties Assets if Only One Tenant Subject to the Claim 53
The Three-Step/Four-Test Analysis 53
Fraudulent Transfers and Civil Conspiracy 60
Elements of a Civil Conspiracy Claim 60
Immunity 62
Inadequate Remedy and Damages 63
The Duty to Disclose 63
Civil Conspiracy and Fraud 64
Transference of Legal Wrong 65
Conclusions 65
Chapter 3
Protecting a Child's Inheritance 73
Part I: Protecting a Child's Inheritance from an Estranged Spouse Under Common Law 73
Mark Merric
I.	Non-Self-Settled Trusts 74
II.	Summary Analysis 75
A.	Current Distribution Analysis--Non-UTC State 75
B.	Remainder Interest Analysis--Non-UTC State 78
III.	Creditor Remedies Prior to the UTC 80
IV.	Drafting Beneficial Interests in a Trust--Non-UTC States 81
A.	 Definitions 81
B.	 Distribution Standard (Type of Distribution Interest) 84
V.	What Is a Property Interest? The Beginning of the Analysis 91
A.	Distribution Standard and the Current Beneficial Interest 93
B.	Interest After an Event Date 95
VI.	Spendthrift Provisions 99
A.	 Discretionary Dynasty Trust 100
B. 	Support Trust's Assets 100
C. 	Conflicting Distribution Language 101
D.	 Hybrid Trust 104
E. 	Remainder Interest 104
F. 	Distributions Received from a Trust 104
VII. Control and Dominion Issues	106
A. 	Courts Held the Beneficiary Controlled the Trust 106
B.	Courts Held the Beneficiary Did Not Control the Trust 107
C.	The Grey Area 107
VIII. Nuances Under State Domestic Relations Law 108
A.	Support Trust 108
B. 	Remainder Interest 109
C. 	Discretionary Distributions Imputed in Computing Alimony 114
IX.	Conclusion 115
Part II: The Uniform Trust Code's Effect on Protecting a Child's Inheritance 116
I.	Understanding the UTC--Skeleton, Tendons, and Flesh 117
II.	Changing the Threshold Standard of Review to an Enforceable Right	118
A.	The Cornerstone of Common Law	118
III.	Is Asset Protection for Discretionary and Support Trusts Now the Same? 123
IV.	Continuum of Discretionary Trusts More Protective? 124
V. 	Expansion of Exception Creditors? 126
A. 	Restatement (Second) of Trusts 126
B. 	Uniform Trust Code 127
VI. 	Increase in Remedies Available for a Creditor 134
A.	Attachment of the Beneficial Interest 136
B. 	Reaching the Underlying Trust Assets 137
C. 	Judicial Foreclosure Sale of the Beneficiary's Interest 138
D. 	Equitable Power of the Courts	 138
E. 	Summary of Interests Subject to Remedies Under the UTC 139
VII. Can All Creditors Sue for a Mandatory Distribution? 139
VIII. The Beginning of the End of Third-Party Medicaid Trusts or Special Needs Trusts Planning 140
A.	Attaching the Beneficial Interest in a Trust 140
IX.	Dominion and Control--May All Creditors Attach a Beneficiary's Interest if He or She Is the Sole Trustee? 141
X. 	Greater Rights in the Domestic Relations Context 142
A. 	Discretionary Trust Case Analysis 142
B. 	Remainder Interests 144
C. 	Other Methods of Recovery 144
XI. 	Do All Creditor Cases Get to Go to Court? 145
A. 	Which Equitable Remedies Should Apply? 145
B. 	What Is the Definition of a "Continuum of Discretionary Trusts"? 146
XII.	Planning Around the UTC and Restatement (Third) of 
Trusts 146
A.	Drafting Recommendations 146
B.	UTC Automatic Flee Clauses 148
C. 	Forum Shopping 148
D. 	Flight of Capital 149
XIII. Conclusion 149
Chapter 4
Selected Drafting Issues with Asset Protection Trusts 167
Daniel S. Rubin
Introduction 167
Drafting for a So-called "Hybrid" Foreign Trust 168
Introduction 168
Definitions 169
The "Court Test" 170
The "Control Test" 174
Drafting for the Possibility of Duress 178
Introduction 178
The Anti-Duress Clause 179
The Contempt of Court Issue 181
Drafting in Consideration of U.S. Gift and Estate Taxes 183
Incomplete Gifts 183
Completed Gifts 185
Internal Revenue Code Section 684 186
Conclusion 187
Chapter 5
Special Drafting Considerations for Asset Protection Trusts: The Offspring of Offshore Trusts 191
Melissa Langa
I.	Introduction 191
II.	The Protector 192
A.	The Problem 192
B. 	The Solution 192
C. 	Sample Provision 193
III. Contingent Payment Clause 197
A.	The Problem 197
B.	The Solution 197
C. 	Sample Provision 199
IV.	Special Jurisdictional Clause 200
A. 	The Problem 200
B. 	The Solution 200
C. 	Sample Provision 201
V. 	Powers of Appointment 203
A. 	The Problem 203
B. 	The Solution 203
C. 	Sample Provisions 204
Chapter 6
The Trust Protector: Friend or Fiduciary? 207
Alexander A. Bove, Jr.
I.	Just What Is a Protector and Why Has the Concept Become So Popular? 207
II. 	Is the Protector Lying About His Age? 209
III.	The Protector and the Asset Protection Trust 210
IV.	What Powers Should Be Given the Protector? 212
V. 	What Is the Relationship Between the Protector and Trustee? 214
VI.	Who May Serve as Protector, and, Once and for All, Is the Protector a Fiduciary? 216
VII.	Professional Protectors 221
VIII. Can the Protector's Fiduciary Duty Be Legislated Away? Or Drafted Away? Or Both?	222
IX.	Is the Protector Subject to Court Supervision? 225
X.	What Are the Rights of the Protector? 227
XI. 	What Are the U.S. Tax Implications of the Role of Protector? 229
XII. 	What Special Drafting Issues Are Brought into Play Along with a Protector? 231
XIII. 	Conclusion 233
Chapter 7
Use of Offshore Limited Partnerships and Limited Liability Companies in Asset Protection Planning 239
Mario A. Mata
I.	Introduction 239
II. 	The "Charging Order" Limitation 241
III. 	The Consequences of "Assignee" Status 242
IV. 	The Offshore Limited Partnership 243
A. 	Bahamas 244
B. 	Cayman Islands 245
C. 	British Virgin Islands 246
D. 	St. Kitts 246
E. 	Bermuda 247
F. 	Gibraltar 248
G. 	Jersey 248
H. 	The Marshall Islands 249
V. 	Offshore Limited Liability Companies 249
A. 	Nevis 250
B. 	Anguilla 251
C. 	The Marshall Islands 252
D. 	Isle of Man 253
VI. 	Redomiciliation of Domestic LP or LLC 254
VII.	Beware of Single-Member LLCs 255
VIII. Drafting Strategies 257
A. 	Protective Language in Partnership Agreement 257
B. 	Use of an LLC vs. IBC as FLP General Partner 258
C. 	Use of an Offshore Trust as Limited Partner 258
IX. 	U.S. Tax Treatment of the Offshore LP and LLC 261
X.	Summary 262
Chapter 8
Singular Problems with Single-Member LLCs 265
Christopher M. Riser
Tax Classification of Single-Member LLCs 265
Foreign LLCs--Tax Traps 266
 Reporting Issues 267
New Foreign Disregarded Entity Information-Reporting Requirements 268
Employer Identification Number Issues 269
Multimember Disregarded LLCs 270
Single-Member LLCs and Charging Order Protection 271
Conclusion 275
Chapter 9
The Purpose of Purpose Trusts 277
Alexander A. Bove, Jr.
Concept and Background 277
The Modern Purpose Trust 279
Purpose Trusts in the United States 280
Offshore Purpose Trusts for U.S. Purposes 281
Requirements of a Valid Purpose Trust 282
Other Drafting Considerations 284
Which Offshore Jurisdiction? 285
For What Purpose the Purpose Trust? 285
U.S. Income Tax Issues 286
U.S. Gift and Estate Tax Issues 287
U.S. Generation-Skipping Tax Issues 289
Review of Grantor vs. Non-Grantor Purpose Trust Tax Consequences 290
Conclusion 291
Chapter 10
Life and Death Tax Issues with Asset Protection Trusts 295
Jeffrey T. Getty
Introduction 295
Federal Income Tax 295
Federal Estate and Gift Taxes 298
Gift Tax 300
Estate Tax 302
Section 2036(a) Transfers with Retained Life Estate 302
Implied Agreement 303
Rights of Creditors 304
Section 2038(a) Revocable Transfers 308
Conclusion 309
Chapter 11
Asset Protection Strategies as Applied to Federal Tax Liabilities 315
Howard S. Fisher
William K. Norman
Introduction 315
State Statutory Limitations on Asset Protection 316
Federal Statutory Limitations on Asset Protection 318
Federal Tax Liens and Levies to Collect Taxes 330
Limited Tax Liens and Levies to Collect Taxes 333
Traditional Asset Protection Concepts as Applied to Tax 336
Attorney-Client Privilege and Certain Asset Protection Planning 344
Ethical Considerations 344
Use of Bankruptcy to Minimize Tax Liability 348
Concluding Thoughts 349
Chapter 12
Use of Civil Law Foundations for Asset Protection 355
Howard S. Fisher
Dennis A. Kleinfeld
Samuel M. Lohman
Introduction 355
Asset Protection--A Brief Summary 355
History of the Civil Law Foundation 357
The Foundation 359
Benefits of the Foundation Over the Trust 362
An Offshore Foundation Is Not a Charitable Foundation 363
Legal Systems 364
Fraudulent Transfers and Foundations 367
Common Law Trusts 368
Nature of a Trust 368
History of the Common Law Trust 369
Few Typical Countries Have Foundation Laws 369
Foundation Regimes 370
Designer Laws 374
Limitation on the Use of Foundations 375
Entity Classification for U.S. Tax Purposes 375
Why You Need an Entity Such as a Trust or a Foundation 378
The Strategy of Avoiding Unreliable Juries 378
Considerations in Selecting a Jurisdiction to Form the Foundation 379
Concluding Comments 381
Chapter 13
Administration of an Offshore Asset Protection Trust--Selected Aspects from the Trustee's Viewpoint 383
John G. McFadzien
Solvency of the Settlor 383
The Effect of Fraud on Attorney/Client Privilege 384
Enforcement Against Settlor of Penal Revenue or Public Laws 387
Actions Generally--the Mareva Injunction 388
Foreign Judgments 390
 Limitations of Time 391
Burden of Proof 392
Chapter 7 Trustees 392
Claims for Exemplary Damages 392
Validity of Dispositions to the Trust 393
Settlor Control of Trust Administration 395
Conclusion 398
Chapter 14
Funding the Foreign Asset Protection Trust--Onshore v. Offshore 401
Gideon Rothschild
Introduction 401
Discussion 402
Issue One: The Specter of a Fraudulent Conveyance 403
Issue Two: Attorney Culpability 404
Issue Three: The Threat of Provisional Remedies 405
Issue Four: The Prospect of Contempt 406
Conclusion 407
Chapter 15
Asset Protection Offered by Swiss Annuities 409
Alexander A. Bove, Jr.
The Swiss Annuity--As Good as Their Chocolate? 410
Protection Dependent on Beneficiary Designation 411
Naming a Trust as Beneficiary 413
Avoid a U.S. Tax Trap 414
Tax-Free Exchange--The Protective Swap 415
Fraudulent Transfer Rules--U.S. and Swiss 416
Anti-Duress Rule 417
Which Laws Will Apply in an Attack--U.S. or Swiss? 417
U.S. Tax Issues 419
Income Tax 419
Excise Tax 420
Estate Tax 420
Swiss Taxes 421
Cost Considerations 421
U.S. Courts' Attitude 422
Conclusion 422
Chapter 16
When Worlds Collide: The Dubious Value of U.S. Judgments in Offshore Jurisdictions 425
Hans Christian Beyer
Introduction 425
Of Treaties, Sovereignty, and Comity 426
Distinguishing Between Offshore and Foreign Jurisdictions 428
Protecting Assets Through the Use of Offshore Financial Centers 429
The Interrelationship of Comity, Fraudulent Transfer Law, and Offshore Jurisdictions 431
Attributes of Popular Offshore Financial Centers 434
Cook Islands 434
Belize 437
Liechtenstein 438
Turks and Caicos 439
Gibraltar 440
Cayman Islands 441
Channel Islands 442
Isle of Man 444
Bahamas 445
Bermuda 446
Other Offshore Financial Centers 447
Other Considerations 448
Monetary Judgments versus Arbitral Awards 448
Judgment Triangulation 449
Some Final Thoughts 449
Chapter 17
Attorney Liability for Assisting in Asset Protection 453
 Robert D. Gillen
Introduction 453
Questions and Concerns 455
Overview of Legal Malpractice 455
The ABA Model Rules 457
Disciplinary Concerns 458
Liability for Not Discussing Asset Protection Planning 461
Attorney Liability Does Exist Today 462
Fraudulent Transfers 463
Criminal Liability 466
Conspiracy to Defraud the United States 467
RICO Claims 467
Aiding and Abetting 469
Fraudulent Conveyance and Conspiracy Claims 470
Conspiracy to Commit Fraud 472
Misprision of a Felony 473
Mail, Wire, and Bank Fraud 473
Federal Tax Crimes 474
 No Attorney Liability Cases 477
In re Portnoy 477
Stephen Jay Lawrence 478
In re Anderson 480
Concluding Thoughts 480
Chapter 18
Money Laundering, RICO, Aiding and Abetting, and Related Due Diligence Concerns for U.S. Asset Protection Planners (Or Why What You Don't Know Can Really Hurt You) 487
John E. Sullivan III
Introduction 487
Issue 1: AML Laws as a Creditor Tool 490
The Starting Point: Money Laundering as a "Bootstrap" Offense 490
So Why Even Worry? (Or, Fraudulent Transfers as SUAs) 490
More U.S. AML Laws: BSA, RICO, Section 1957, and Other Laws 495
Issue 2: Due Diligence Steps to Help Prevent Client Money Laundering 507
Data From the Client 507
Data From Third-Party Sources 510
The Impact of Due Diligence--In Theory and in Two Case Studies 513
Building Your File 516
Conclusion 517
Appendix 1: Mail and Wire Fraud 519
Appendix 2: Some Basic History and Background: U.S. AML Leadership and the BSA 523
Chapter 19
Attorney Ethical Liability in the Application of the Terms "Fraud" versus "Fraudulent Transfers" Under the Uniform Fraudulent Transfer Act 541
Denis A. Kleinfeld
An Introduction and Summary 541
Discussion of Common Law Fraud 544
Discussion of Fraudulent Transfer--A Legal Remedy 547
Criminal Fraudulent Transfer Statutes 552
Fraud v. Fraudulent Conveyance--Attorney Ethics and Liability 553
Is an Attorney Liable as an Aider and Abettor, or in Conspiracy Under the UFTA? 556
The "New" Tort of Creditor Fraud 566
Conclusion 568
Index 571

Library of Congress Subject Headings for this publication:

Executions (Law) -- United States.
Debtor and creditor -- United States.
Trusts and trustees -- United States.
Tax havens -- United States.
Estate planning -- United States.