¶ 2901
Overview
From evaluation to decision. Chapter 21 set out a method for evaluating a jurisdiction on seven dimensions (see supra ¶ 2110.01). Chapters 22 to 28 applied it to the principal jurisdictions and profiled others. This chapter turns from evaluation to decision. It addresses three questions that the planner faces after the jurisdictions have been assessed. Which jurisdiction, or which combination of jurisdictions, best fits this client? How should several jurisdictions be combined in one plan? And when and how may a structure be moved from one jurisdiction to another?
Why combination is the norm. Few well-designed plans rely on a single jurisdiction. A client's assets are located in several places, the client lives in one state and may move to another, and the threats the client faces differ in their reach. A typical plan for a U.S. client with significant wealth uses the exemptions of the home state, a domestic entity to hold operating assets or real property, and a trust governed by the law of a protective jurisdiction, with investment accounts held at a bank in a third. Each layer is governed by its own law. The plan works only if the layers are consistent with each other and with the client's threat profile (see supra ¶ 240.08).
Why migration matters. No jurisdiction can guarantee its law will remain unchanged for the life of a trust that may last a century or more (see supra ¶ 2150.07). Clients move, trustees are acquired, and legislatures amend statutes. A well-drafted structure therefore provides for its own migration. The same power to migrate, used after a claim arises, can be a transfer in fraud of creditors and, if exercised in breach of a court order, a contempt (see infra ¶ 2980). The design of migration provisions and the timing of their use are central to this chapter.
Scope of the chapter. This chapter examines the selection criteria that bear on the choice of jurisdiction (see infra ¶ 2910), the matching of jurisdiction to threat (see infra ¶ 2920), the choice between domestic and offshore protection (see infra ¶ 2930), hybrid and bridge structures (see infra ¶ 2940), the combination of jurisdictions in layers (see infra ¶ 2950), the migration of trusts (see infra ¶ 2960) and of entities (see infra ¶ 2970), and migration after a claim has arisen (see infra ¶ 2980). It closes with a decision protocol (see infra ¶ 2990).