¶ 2101
Overview
Scope of Part IV. Part III examined the structures of asset protection: title, exemptions, insurance, entities, trusts and transfers. Each of those structures takes its force from the law of a particular place. A spendthrift clause is enforced because the governing law enforces it; a charging order is exclusive because a statute says so; a self-settled trust is protected because a legislature reversed the common law. Part IV examines the places. This chapter sets out a method for evaluating any jurisdiction. Chapters 22 through 27 apply it in depth to six jurisdictions that serve as reference points: the Cook Islands, Nevis, Belize, Switzerland, Wyoming and Delaware (see infra chs. 22–27). Chapter 28 surveys other jurisdictions more briefly, and chapter 29 addresses choosing, combining and migrating among them (see infra chs. 28–29).
Why a method. Jurisdictions compete for trust business, and each markets itself with claims about its protection. Practitioners often compare jurisdictions by a single feature: the length of the limitation period, the standard of proof, the refusal to enforce foreign judgments. A single feature can mislead. A jurisdiction with a short limitation period may have courts that have never applied it under pressure; a jurisdiction with strong statutes may be on international blacklists that make banking difficult; a jurisdiction whose law is excellent may have few trustees of quality. The method in this chapter evaluates a jurisdiction across every dimension that bears on whether a structure governed by its law will hold when a creditor tests it, and on what it will cost the client to maintain it in the meantime.
The organizing question. The evaluation always begins with the client. The useful question asks "Which jurisdiction best protects this client's assets against this client's likely creditors, at a cost and with obligations this client can sustain?" The Threat Matrix of chapter 2 frames the answer (see supra ch. 2). A physician whose dominant threat is a tort plaintiff in a state court (C2) needs something different from a business owner whose dominant threat is a federal regulator (C5), and both need something different from a client whose dominant concern is a future divorce (C3). The jurisdiction is chosen for the threat.