Lighthouse
Lighthouse on Asset Protection

Detailed Contents

This table lists every chapter, section and subsection of Lighthouse on Asset Protection with its paragraph (¶) number. Each entry links to its place in the text.

Part I: First Principles

Chapter 1The Purpose and Legitimacy of Asset Protection

  1. ¶ 101Overview
    1. 101.01Scope of the chapter
    2. 101.02Organization
    3. 101.03Terminology
  2. ¶ 110Definition
    1. 110.01Working definition
    2. 110.02First element: arrangement in advance
    3. 110.03Second element: future creditors
    4. 110.04Third element: lawful reach
    5. 110.05Fourth element: full compliance
    6. 110.06Related conduct distinguished
  3. ¶ 120Why Clients Seek Protection
    1. 120.01Overview
    2. 120.02The litigation environment
    3. 120.03Professionals
    4. 120.04Business owners, executives and guarantors
    5. 120.05Family risk
    6. 120.06Regulatory and sovereign risk
    7. 120.07Succession and continuity
    8. 120.08Peace of mind
  4. ¶ 130The Legal Pedigree
    1. 130.01Overview
    2. 130.02Spendthrift trusts
    3. 130.03Exemptions
    4. 130.04Limited liability
    5. 130.05Tenancy by the entirety
    6. 130.06Retirement plans
    7. 130.07The limiting rule
    8. 130.08The self-settled trust
  5. ¶ 140Judicial Attitudes
    1. 140.01Overview
    2. 140.02Respect for advance planning
    3. 140.03FTC v. Affordable Media, LLC
    4. 140.04In re Lawrence
    5. 140.05What the contempt cases decide
    6. 140.06Other recurring patterns
  6. ¶ 150Realistic Goals
    1. 150.01Deterrence and settlement
    2. 150.02Preservation against judgment
    3. 150.03Privacy and secrecy distinguished
    4. 150.04Integration with estate, tax and succession planning
    5. 150.05Measuring success
  7. ¶ 160Limits of Asset Protection
    1. 160.01Overview
    2. 160.02Existing and foreseeable creditors
    3. 160.03Control and protection
    4. 160.04Insurance
    5. 160.05Compliance
    6. 160.06The client's own conduct
    7. 160.07Changes in law
    8. 160.08No guarantee
  8. ¶ 170The Three Variables
    1. 170.01Overview
    2. 170.02Timing
    3. 170.03Title
    4. 170.04Forum
    5. 170.05Interaction of the variables
  9. ¶ 180Conditions of a Defensible Plan
    1. 180.01Overview
    2. 180.02First condition: solvency
    3. 180.03Second condition: no known claims
    4. 180.04Third condition: documented source of wealth
    5. 180.05Fourth condition: full reporting
    6. 180.06Consequence of failure

Chapter 2The Threat Matrix

  1. ¶ 201Overview
    1. 201.01Purpose of the Threat Matrix
    2. 201.02Why a single ranking is inadequate
    3. 201.03The three axes
    4. 201.04Sources of the ratings
    5. 201.05How to read the chapter
  2. ¶ 210Axis One: The Creditor
    1. 210.01Why creditors are classified
    2. 210.02C1: Contract creditors
    3. 210.03C2: Tort creditors
    4. 210.04C3: Spouses
    5. 210.05C4: Support claimants
    6. 210.06C5: Sovereign creditors
    7. 210.07C6: The bankruptcy trustee
    8. 210.08Claimants in more than one class
    9. 210.09Dominant and secondary classes
    10. 210.10Creditors who change class
    11. 210.11Insurers and subrogated creditors
    12. 210.12Litigation funders and debt buyers
    13. 210.13Related creditors
    14. 210.14Exposure across a client's life
  3. ¶ 220Axis Two: Timing
    1. 220.01Four positions
    2. 220.02T0: Clear
    3. 220.03T1: Foreseeable
    4. 220.04T2: Pending
    5. 220.05T3: Judgment
    6. 220.06The timing adjustment
    7. 220.07Exemptions and conversion
    8. 220.08Multiple creditors at different positions
    9. 220.09Proving the timing position
    10. 220.10Staged and recurring transfers
    11. 220.11Transactions for value at T1
    12. 220.12Knowledge through agents and companies
    13. 220.13Seasoning
  4. ¶ 230Axis Three: Forum
    1. 230.01Three questions
    2. 230.02Reach of law: which law governs
    3. 230.03Reach over the custodian
    4. 230.04Reach over the debtor
    5. 230.05Reading the answers
    6. 230.06The creditor chooses the forum
    7. 230.07Bankruptcy as a forum
    8. 230.08The debtor's mobility
    9. 230.09The divorce court as a forum
    10. 230.10What the creditor can learn
    11. 230.11Arbitration as a forum
  5. ¶ 240The Matrix
    1. 240.01The ratings
    2. 240.02Meaning of the ratings
    3. 240.03Commentary by row
    4. 240.04Observations
    5. 240.05The ratings across timing positions
    6. 240.06Less common tools
    7. 240.07Disagreement and uncertainty
    8. 240.08Rating a layered plan
    9. 240.09Ratings and the client's state of residence
    10. 240.10From ratings to settlement value
  6. ¶ 250Retained Control and Benefit
    1. 250.01The modifying factor
    2. 250.02Effect of common retained powers
    3. 250.03The control continuum
    4. 250.04Control in fact
    5. 250.05Benefit as distinct from control
    6. 250.06Family members and related parties as fiduciaries
    7. 250.07Changing retained powers after funding
    8. 250.08Control through information and influence
  7. ¶ 260Applying the Matrix
    1. 260.01The five-step assessment
    2. 260.02Illustration: a physician
    3. 260.03Illustration: a founder with guarantees
    4. 260.04Illustration: an international family
    5. 260.05Illustration: a couple in a community-property state
    6. 260.06Illustration: a retiree with real estate
    7. 260.07Common errors in applying the matrix
    8. 260.08Illustration: a client who has just been sued
    9. 260.09Recording the assessment
  8. ¶ 270Limits and Maintenance of the Matrix
    1. 270.01A starting point
    2. 270.02Reassessment
    3. 270.03The worksheet as evidence
    4. 270.04Using the matrix with clients
    5. 270.05The matrix and the standard of care
    6. 270.06The matrix in later chapters

Chapter 3The Planner's Duties: Ethics, Civil Exposure and Criminal Lines

  1. ¶ 301Overview
    1. 301.01Scope of the chapter
    2. 301.02Risk follows timing
    3. 301.03Who is a planner
    4. 301.04Sources of duty
  2. ¶ 310Professional Responsibility
    1. 310.01The central rule
    2. 310.02Knowledge
    3. 310.03Fraud
    4. 310.04Related rules
    5. 310.05State ethics opinions
    6. 310.06Non-lawyer advisors
    7. 310.07Promoters
    8. 310.08Communication and informed consent
    9. 310.09Fees
    10. 310.10Multijurisdictional practice
    11. 310.11Supervising non-lawyers and foreign service providers
    12. 310.12Marketing asset protection services
    13. 310.13Beneficiaries and family members
    14. 310.14When the client has lied
  3. ¶ 320Civil Exposure
    1. 320.01Overview
    2. 320.02Claims by the defeated creditor
    3. 320.03Transferee and fee exposure
    4. 320.04Liability to the client
    5. 320.05Loss of privilege: the crime-fraud exception
    6. 320.06Professional liability insurance
    7. 320.07Limitation periods for claims against planners
    8. 320.08The planner as witness
    9. 320.09Responding to a subpoena for the planning file
    10. 320.10Defending the planner
    11. 320.11Accountants and financial advisors
  4. ¶ 330Criminal Lines
    1. 330.01Overview
    2. 330.02Bankruptcy crimes
    3. 330.03State criminal statutes
    4. 330.04Tax crimes
    5. 330.05Reporting and money laundering
    6. 330.06Contempt and obstruction
    7. 330.07The client's privilege against self-incrimination
    8. 330.08Grand jury and agency subpoenas to the planner
    9. 330.09Correcting past non-compliance
    10. 330.10Patterns in prosecutions of advisors
    11. 330.11Forfeiture and the planner's fees
  5. ¶ 340The Trustee's Separate Position
    1. 340.01Overview
    2. 340.02Fiduciary duties
    3. 340.03Duress clauses and the trustee's own law
    4. 340.04Regulatory obligations
    5. 340.05The trustee as transferee and defendant
    6. 340.06Acceptance standards
    7. 340.07Responding to orders and subpoenas
    8. 340.08Resignation and migration
    9. 340.09Protectors
    10. 340.10The trustee's records
    11. 340.11U.S. trust companies and private trust companies
    12. 340.12The trustee's duty to defend the trust
    13. 340.13Trustee fees and indemnity
  6. ¶ 350A Model Engagement Protocol
    1. 350.01Purpose
    2. 350.02Before any transfer
    3. 350.03The engagement letter
    4. 350.04The solvency affidavit
    5. 350.05Warning signs and responses
    6. 350.06Declining and withdrawing
    7. 350.07The planning file
    8. 350.08The governing question
    9. 350.09The ongoing engagement
    10. 350.10Model engagement-letter provisions
    11. 350.11Closing the engagement
    12. 350.12The client who arrives with a claim
    13. 350.13The protocol at a glance
    14. 350.14Training and supervision within the firm

Part II: The Threat

Chapter 4Who the Creditors Are: Contract, Tort, Family, Regulatory and Sovereign Claimants

  1. ¶ 401Overview
    1. 401.01Scope of the chapter
    2. 401.02Why the creditor comes first
    3. 401.03How a person becomes a creditor
    4. 401.04The definition of a claim
    5. 401.05How to read the chapter
  2. ¶ 410Contract Creditors (C1)
    1. 410.01Voluntary credit
    2. 410.02Personal guarantees
    3. 410.03Financial statements given to lenders
    4. 410.04Negative covenants and contractual waivers
    5. 410.05Prejudgment remedies
    6. 410.06Confessions of judgment and cognovit clauses
    7. 410.07Entity liability that becomes personal
    8. 410.08Professional and trade creditors
    9. 410.09The contract creditor's remedies against protective structures
  3. ¶ 420Tort Creditors (C2)
    1. 420.01The involuntary creditor
    2. 420.02The claim arises at the incident
    3. 420.03Sources of personal tort exposure
    4. 420.04Insurance as the first line of defense
    5. 420.05Punitive damages and uninsurable claims
    6. 420.06Vicarious and entity-related tort liability
    7. 420.07Mass torts and product liability
    8. 420.08Spendthrift protection and the tort creditor
    9. 420.09The tort creditor's remedies against protective structures
  4. ¶ 430Family Claimants (C3 and C4)
    1. 430.01Two classes with one source
    2. 430.02Property division: equitable distribution and community property
    3. 430.03Dissipation and waste
    4. 430.04Premarital and marital agreements
    5. 430.05Trusts in the divorce court
    6. 430.06Support claimants as exception creditors
    7. 430.07Enforcement against the person
    8. 430.08Surviving spouses and heirs
    9. 430.09Family claimants in the matrix
  5. ¶ 440Regulatory Claimants (C5)
    1. 440.01Agencies as creditors
    2. 440.02Disgorgement, restitution and penalties
    3. 440.03Strict and joint liability regimes
    4. 440.04Asset freezes and repatriation orders
    5. 440.05State attorneys general and licensing boards
    6. 440.06Criminal investigations
  6. ¶ 450Sovereign Claimants (C5)
    1. 450.01The federal tax lien
    2. 450.02The collection period
    3. 450.03Levy, suit and foreclosure
    4. 450.04Trust-fund taxes and personal liability
    5. 450.05Federal non-tax debts and the Federal Debt Collection Procedures Act
    6. 450.06Criminal restitution and forfeiture
    7. 450.07State taxing authorities
    8. 450.08Foreign sovereigns
  7. ¶ 460The Bankruptcy Trustee (C6)
    1. 460.01The trustee's powers
    2. 460.02The triggering-creditor problem
    3. 460.03Self-settled trusts and section 548(e)
    4. 460.04Exemptions in bankruptcy
    5. 460.05Involuntary bankruptcy
    6. 460.06Denial and limitation of discharge
    7. 460.07Cross-border reach
  8. ¶ 470Claimants Against Beneficiaries and Entities
    1. 470.01The beneficiary's creditors
    2. 470.02Creditors of entities owned by the structure
    3. 470.03Creditors of co-owners and fiduciaries
  9. ¶ 480Profiling the Client's Creditors
    1. 480.01The creditor profile
    2. 480.02Sources of information
    3. 480.03Solvency testing
    4. 480.04From profile to matrix
    5. 480.05Maintaining the profile

Chapter 5Timing: The Claim Lifecycle and the Foreseeable Creditor

  1. ¶ 501Overview
    1. 501.01Scope of the chapter
    2. 501.02Why timing dominates
    3. 501.03The vocabulary of the chapter
    4. 501.04How to read the chapter
  2. ¶ 510Who Is a Creditor
    1. 510.01Statutory definitions
    2. 510.02Present and future creditors
    3. 510.03Consequence for planning
    4. 510.04Disputed and unliquidated claims
    5. 510.05When a claim arises
    6. 510.06Judgments do not create claims
    7. 510.07Assignees and successors
  3. ¶ 520The Claim Lifecycle
    1. 520.01Stages
    2. 520.02The gap between incident and awareness
    3. 520.03Latent claims
    4. 520.04Business distress as a lifecycle
    5. 520.05Placing the client on the lifecycle
  4. ¶ 530Existing, Foreseeable and Future Creditors
    1. 530.01Existing creditors
    2. 530.02Foreseeable creditors
    3. 530.03Future creditors
    4. 530.04The common law on self-settled trusts and future creditors
    5. 530.05Evidence of purpose
    6. 530.06Transfers in anticipation of a change in risk
  5. ¶ 540Limitation Periods
    1. 540.01State law
    2. 540.02The discovery extension
    3. 540.03Extinguishment, repose and tolling
    4. 540.04Federal law
    5. 540.05The featured jurisdictions
    6. 540.06Periods for claims against the planner and the trustee
    7. 540.07Which period applies
  6. ¶ 550Fixing the Date of Transfer
    1. 550.01Statutory rules
    2. 550.02Each transfer stands alone
    3. 550.03Staged and recurring funding
    4. 550.04Indirect transfers
    5. 550.05Obligations incurred
    6. 550.06Records
  7. ¶ 560Seasoning in Practice
    1. 560.01The concept restated
    2. 560.02Seasoning by creditor class
    3. 560.03Disclosure as a seasoning tool
    4. 560.04Planning ahead of a known event
    5. 560.05The client who arrives late
    6. 560.06Reconstructing the timeline in litigation
  8. ¶ 570Practice Points
    1. 570.01The timing checklist
    2. 570.02Summary of points

Chapter 6Voidable Transactions I: From the Statute of Elizabeth to the UVTA

  1. ¶ 601Overview
    1. 601.01Scope of the chapter
    2. 601.02Why the history matters
    3. 601.03How to read the chapter
  2. ¶ 610The English Origin
    1. 610.01Before 1571
    2. 610.02The Statute of Elizabeth
    3. 610.03Twyne's Case
    4. 610.04The original badges
    5. 610.05Voluntary settlements and existing creditors
    6. 610.06Voluntary settlements and future creditors
    7. 610.07The modern English successor
  3. ¶ 620Reception in the United States
    1. 620.01Common law and early statutes
    2. 620.02The strict view: voluntary settlements and existing creditors
    3. 620.03Future creditors in the Supreme Court
    4. 620.04The Bankruptcy Acts
    5. 620.05The need for uniformity
  4. ¶ 630The Uniform Fraudulent Conveyance Act (1918)
    1. 630.01Structure
    2. 630.02Fair consideration
    3. 630.03Adoption
    4. 630.04The fair-consideration cases
  5. ¶ 640The Uniform Fraudulent Transfer Act (1984)
    1. 640.01Reasonably equivalent value
    2. 640.02The statutory badges
    3. 640.03The transferee's defenses
    4. 640.04Extinguishment
    5. 640.05Insider preferences
    6. 640.06Adoption
  6. ¶ 650The Uniform Voidable Transactions Act (2014)
    1. 650.01The change of name
    2. 650.02Choice of law
    3. 650.03Burden and standard of proof
    4. 650.04Series organizations
    5. 650.05Self-settled trusts in the official comments
    6. 650.06Other changes
    7. 650.07Adoption
  7. ¶ 660State Law and the Bankruptcy Code
    1. 660.01Two parallel regimes
    2. 660.02Differences that matter
    3. 660.03Section 548(e)
  8. ¶ 670Persistence of the Common Law and Parallel Doctrines
    1. 670.01The statutes as codification
    2. 670.02Creditors' bills and equitable remedies
    3. 670.03Alter ego, reverse veil piercing and nominee doctrines
    4. 670.04Criminal statutes
    5. 670.05The civil-law tradition: the actio pauliana
    6. 670.06The offshore departures
    7. 670.07What the history teaches the planner
  9. ¶ 680The Regimes Compared
    1. 680.01A single view
    2. 680.02Points of convergence
    3. 680.03Points of divergence
  10. ¶ 690Reading a Voidable-Transactions Statute
    1. 690.01A method
    2. 690.02Local variations to watch
    3. 690.03The question behind every statute

Chapter 7Voidable Transactions II: Intent, Badges, Solvency, Remedies, Transferee Liability and Criminal Exposure

  1. ¶ 701Overview
    1. 701.01Scope of the chapter
    2. 701.02The planner's use of this chapter
    3. 701.03How to read the chapter
  2. ¶ 710Actual Intent
    1. 710.01The rule
    2. 710.02What "hinder" means in planning
    3. 710.03Whose intent
    4. 710.04Direct evidence: statements of purpose
    5. 710.05The statutory badges
    6. 710.06Weighing the badges
    7. 710.07Rebutting the inference
    8. 710.08Self-settled structures as evidence of intent
  3. ¶ 720Constructive Fraud
    1. 720.01Two forms
    2. 720.02Reasonably equivalent value
    3. 720.03Estate-planning transfers
    4. 720.04Unreasonably small assets
    5. 720.05Debts beyond ability to pay
    6. 720.06Insider preferences
    7. 720.07Obligations incurred
  4. ¶ 730Solvency
    1. 730.01Balance-sheet test
    2. 730.02Presumption from non-payment
    3. 730.03Exclusions from "assets."
    4. 730.04Contingent liabilities
    5. 730.05Fair valuation
    6. 730.06The solvency affidavit
    7. 730.07Measuring after the transfer
  5. ¶ 740Remedies
    1. 740.01The creditor's remedies
    2. 740.02Avoidance is limited to the claim
    3. 740.03Money judgment against the transferee
    4. 740.04Provisional remedies against transferees
    5. 740.05Equitable remedies against the structure
    6. 740.06Costs, interest and fees
  6. ¶ 750Transferees
    1. 750.01The good-faith transferee for value
    2. 750.02Partial protection for good-faith transferees
    3. 750.03The trustee as first transferee
    4. 750.04The person for whose benefit the transfer was made
    5. 750.05Subsequent transferees and beneficiaries
    6. 750.06Planning responses for transferees
    7. 750.07Defenses specific to section 5(b)
  7. ¶ 760Criminal Exposure
    1. 760.01Scope
    2. 760.02Forms of state statute
    3. 760.03Elements and grading
    4. 760.04Federal offenses
    5. 760.05Accomplice liability
    6. 760.06Interaction with the civil case
  8. ¶ 770Litigating a Voidable-Transfer Claim
    1. 770.01The creditor's case
    2. 770.02The debtor's case
    3. 770.03Summary judgment and trial
    4. 770.04Resolution
    5. 770.05The planner as witness
    6. 770.06Summary: from rules to design

Chapter 8Bankruptcy as the Creditor's Strongest Weapon

  1. ¶ 801Overview
    1. 801.01Scope of the chapter
    2. 801.02Why bankruptcy is the creditor's strongest weapon
    3. 801.03Who uses bankruptcy against a protected debtor
    4. 801.04How to read the chapter
  2. ¶ 810The Debtor's Duties and the Trustee's Position
    1. 810.01The automatic stay
    2. 810.02The debtor's duties
    3. 810.03The trustee
    4. 810.04Chapter 11 and chapter 13
  3. ¶ 820Involuntary Petitions
    1. 820.01Who may file
    2. 820.02The standard for relief
    3. 820.03Risks to petitioning creditors
    4. 820.04The planning response
  4. ¶ 830The Trustee's Investigative Powers
    1. 830.01The meeting of creditors
    2. 830.02Rule 2004 examinations
    3. 830.03Turnover
    4. 830.04The trustee's access to records
  5. ¶ 840Trusts and Entities as Property of the Estate
    1. 840.01The breadth of the estate
    2. 840.02The spendthrift exclusion
    3. 840.03Retained powers
    4. 840.04Entity interests
  6. ¶ 850The Avoidance Powers as a Single Attack
    1. 850.01The trustee's sequence
    2. 850.02Unperfected transfers
    3. 850.03Recovery from the trustee of the trust
    4. 850.04Time to sue
  7. ¶ 860The Discharge as Leverage
    1. 860.01Grounds for denial
    2. 860.02Continuing concealment
    3. 860.03The consequence of denial
    4. 860.04Nondischargeable debts
  8. ¶ 870The Court's Power Over the Debtor's Person
    1. 870.01Turnover orders and contempt
    2. 870.02In re Lawrence
    3. 870.03Limits on coercive confinement
  9. ¶ 880Cross-Border Insolvency
    1. 880.01The reach of the estate and the limits of enforcement
    2. 880.02The Model Law
    3. 880.03Recognition at common law
    4. 880.04The trustee's options abroad
    5. 880.05Foreign debtors in U.S. bankruptcy
  10. ¶ 890Planning for the Settlor's Bankruptcy
    1. 890.01Identifying the bankruptcy-prone client
    2. 890.02Design principles
    3. 890.03The client who is considering filing
    4. 890.04Bankruptcy in the Threat Matrix
    5. 890.05The lesson of the chapter

Chapter 9Spouses and Family Claimants

  1. ¶ 901Overview
    1. 901.01Scope of the chapter
    2. 901.02Why family claimants are different
    3. 901.03Legitimate and illegitimate objectives
    4. 901.04How to read the chapter
  2. ¶ 910Protective Structures in the Marital Estate
    1. 910.01Classification
    2. 910.02Structures created before marriage
    3. 910.03Structures created during marriage
    4. 910.04Active and passive appreciation
    5. 910.05Tracing and records
  3. ¶ 920Self-Settled Trusts in Divorce
    1. 920.01The court's tools
    2. 920.02Statutory exceptions for spouses
    3. 920.03The spouse as a creditor under voidable-transactions law
  4. ¶ 930Third-Party Trusts for Beneficiaries Who Marry
    1. 930.01The legitimate objective
    2. 930.02Decanting in the face of divorce
    3. 930.03Distributions as income
    4. 930.04Drafting for beneficiaries who marry
  5. ¶ 940Premarital and Marital Agreements
    1. 940.01The most effective tool
    2. 940.02Requirements for enforceability
    3. 940.03Integrating the agreement with the protective plan
    4. 940.04Marital agreements
  6. ¶ 950Support Claimants
    1. 950.01The privileged position of support
    2. 950.02Imputed income and trust resources
    3. 950.03Child support and third-party trusts
    4. 950.04Enforcement across borders
  7. ¶ 960Transfers in Contemplation of Divorce
    1. 960.01Dissipation
    2. 960.02Automatic restraining orders
    3. 960.03The planner's duty
  8. ¶ 970Rights at Death
    1. 970.01The elective share and the augmented estate
    2. 970.02Non-UPC states
    3. 970.03Waiver
    4. 970.04Forced heirship
  9. ¶ 980Cross-Border Family Claims
    1. 980.01Foreign divorce courts and trusts
    2. 980.02Recognition in the trust jurisdiction
    3. 980.03International couples
  10. ¶ 990The Planning Protocol for Family Claimants
    1. 990.01Planning by stage of life
    2. 990.02Family claimants in the matrix
    3. 990.03The lesson of the chapter

Chapter 10The Government as Creditor: IRS, FTC, SEC, DOJ Forfeiture and Repatriation Orders

  1. ¶ 1001Overview
    1. 1001.01Scope of the chapter
    2. 1001.02Why the government is different
    3. 1001.03The planner's position
    4. 1001.04How to read the chapter
  2. ¶ 1010The IRS as Collector
    1. 1010.01Assessment and the lien
    2. 1010.02Levy and due process
    3. 1010.03Collection information statements
    4. 1010.04Suits to foreclose and injunctions
    5. 1010.05Nominee, alter ego and transferee liability
    6. 1010.06Passport certification
    7. 1010.07The collection period
  3. ¶ 1020Tax Crimes in Collection
    1. 1020.01Evasion of payment
    2. 1020.02Concealment and false statements
    3. 1020.03Obstruction
    4. 1020.04The planner's exposure
  4. ¶ 1030The Federal Trade Commission and State Attorneys General
    1. 1030.01The FTC's remedies after AMG
    2. 1030.02Asset freezes and receiverships
    3. 1030.03State attorneys general
  5. ¶ 1040The Securities and Exchange Commission
    1. 1040.01Monetary remedies
    2. 1040.02Freezes, repatriation and contempt
  6. ¶ 1050Other Federal Agencies
    1. 1050.01Survey
    2. 1050.02The False Claims Act
  7. ¶ 1060Forfeiture and Restitution
    1. 1060.01Civil and criminal forfeiture
    2. 1060.02Relation back and third parties
    3. 1060.03Substitute assets
    4. 1060.04Pretrial restraint
    5. 1060.05Restitution
  8. ¶ 1070Repatriation Orders
    1. 1070.01Sources of the power
    2. 1070.02Compliance and impossibility
    3. 1070.03The trustee's position
  9. ¶ 1080Foreign Governments and International Cooperation
    1. 1080.01Information exchange
    2. 1080.02Mutual legal assistance
    3. 1080.03Collection assistance
    4. 1080.04Sanctions
  10. ¶ 1090Planning When the Government May Be the Creditor
    1. 1090.01Principles
    2. 1090.02The government in the matrix
    3. 1090.03The lesson of the chapter

Part III: Building Blocks

Chapter 11Title and Ownership: Tenancy by the Entirety, Community Property and Joint Interests

  1. ¶ 1101Overview
    1. 1101.01Scope of the chapter
    2. 1101.02Why title comes first
    3. 1101.03Title in the Threat Matrix
    4. 1101.04How to read the chapter
    5. 1101.05The planner's questions
  2. ¶ 1110The Forms of Ownership
    1. 1110.01The choices
    2. 1110.02Title and the voidable-transactions law
    3. 1110.03Title and the governing law
    4. 1110.04Title records and proof
  3. ¶ 1120Tenancy by the Entirety
    1. 1120.01Nature of the tenancy
    2. 1120.02Recognition among the states
    3. 1120.03Creditors of one spouse
    4. 1120.04Bank and brokerage accounts
    5. 1120.05The limits of the protection
    6. 1120.06Bankruptcy
    7. 1120.07Survivorship and divorce
    8. 1120.08Transfers into the tenancy
    9. 1120.09Tenancy-by-the-entirety trusts
    10. 1120.10Moving to an entireties state
    11. 1120.11Entireties and the debtor's conduct
    12. 1120.12Proceeds of entireties property
  4. ¶ 1130Community Property
    1. 1130.01The regime
    2. 1130.02Community property and creditors
    3. 1130.03Community property in bankruptcy
    4. 1130.04Partition and transmutation
    5. 1130.05Community-property trusts in separate-property states
    6. 1130.06Moving between regimes
  5. ¶ 1140Joint Tenancy, Tenancy in Common and Joint Accounts
    1. 1140.01Tenancy in common
    2. 1140.02Joint tenancy with right of survivorship
    3. 1140.03Joint bank accounts
    4. 1140.04Payable-on-death and transfer-on-death designations
    5. 1140.05Convenience accounts and agency designations
  6. ¶ 1150Transfers Between Spouses
    1. 1150.01The impulse to shift title
    2. 1150.02The risks of shifting title
    3. 1150.03Equalizing estates
    4. 1150.04The gift record
    5. 1150.05Sales and loans between spouses
    6. 1150.06The non-citizen spouse
  7. ¶ 1160Nominee Title, Land Trusts and Privacy
    1. 1160.01Privacy is not protection
    2. 1160.02Land trusts
    3. 1160.03Anonymous entities
    4. 1160.04Nominee title and the IRS
    5. 1160.05Concealment as a badge
    6. 1160.06Nominee findings in practice
  8. ¶ 1170Unmarried Couples and Other Households
    1. 1170.01The gap in protection
    2. 1170.02Exposure to each partner's creditors
    3. 1170.03Parents and adult children
    4. 1170.04Registered partners and civil unions
  9. ¶ 1180Title Across Borders
    1. 1180.01Foreign matrimonial regimes
    2. 1180.02The Hague Convention on matrimonial property
    3. 1180.03U.S. property of foreign clients
    4. 1180.04Foreign property of U.S. clients
    5. 1180.05Foreign spouses holding U.S. entireties property
  10. ¶ 1190The Title Audit
    1. 1190.01Purpose
    2. 1190.02Method
    3. 1190.03Title in the matrix
    4. 1190.04Correcting title
    5. 1190.05Title as part of the larger plan
    6. 1190.06Common audit findings
    7. 1190.07Timing the corrections

Chapter 12Statutory Exemptions: Homestead, Wages, Life Insurance and Annuities

  1. ¶ 1201Overview
    1. 1201.01Scope of the chapter
    2. 1201.02Why exemptions matter
    3. 1201.03The limits of exemptions
    4. 1201.04How to read the chapter
    5. 1201.05Exemptions, exclusions and immunities
  2. ¶ 1210The Framework of Exemption Law
    1. 1210.01State exemptions outside bankruptcy
    2. 1210.02Exemptions in bankruptcy
    3. 1210.03Creditors that override exemptions
    4. 1210.04Waiver
    5. 1210.05Exemptions and the voidable-transactions law
    6. 1210.06Exemptions in the featured domestic jurisdictions
    7. 1210.07Claiming and losing exemptions in bankruptcy
    8. 1210.08Debtors with assets in several states
  3. ¶ 1220The Homestead
    1. 1220.01Purpose and range
    2. 1220.02Requirements
    3. 1220.03The Florida and Texas homesteads
    4. 1220.04Homestead and federal creditors
    5. 1220.05Homestead in bankruptcy
    6. 1220.06Homestead planning
    7. 1220.07Homesteads held in trusts and entities
    8. 1220.08Proceeds of sale and replacement
    9. 1220.09Homestead and the family
    10. 1220.10Encumbering the homestead
    11. 1220.11Forfeiture and the homestead
  4. ¶ 1230Wages and Earnings
    1. 1230.01The federal limit
    2. 1230.02State wage exemptions
    3. 1230.03Earnings after deposit
    4. 1230.04Owners of businesses
    5. 1230.05Head of family
    6. 1230.06Deposited wages and federal benefits
  5. ¶ 1240Life Insurance
    1. 1240.01Two interests to protect
    2. 1240.02Cash value
    3. 1240.03Death benefits
    4. 1240.04Premiums paid in fraud of creditors
    5. 1240.05Ownership and control
    6. 1240.06Policy loans and split-dollar arrangements
    7. 1240.07Choosing the owner of the policy
    8. 1240.08Proceeds in the beneficiary's hands
  6. ¶ 1250Annuities
    1. 1250.01State protection
    2. 1250.02Annuities in bankruptcy
    3. 1250.03Annuities as a protective tool
    4. 1250.04Ownership of the annuity
    5. 1250.05Annuities and retirement plans compared
  7. ¶ 1260Other Exemptions
    1. 1260.01Survey
    2. 1260.02Section 529 plans
    3. 1260.03Exemptions that follow the debtor's needs
    4. 1260.04Health savings and ABLE accounts
    5. 1260.05Personal-injury recoveries and structured settlements
  8. ¶ 1270Converting Non-Exempt Assets
    1. 1270.01The question
    2. 1270.02The general rule
    3. 1270.03Statutory limits on conversion
    4. 1270.04Conversion and the voidable-transactions law
    5. 1270.05Planning guidelines for conversions
    6. 1270.06Conversion after Havoco
  9. ¶ 1280Changing Domicile
    1. 1280.01Moving to a more protective state
    2. 1280.02Exemptions for non-residents
    3. 1280.03Debtors who move abroad or have no recent domicile
  10. ¶ 1290Exemptions in the Threat Matrix
    1. 1290.01Ratings
    2. 1290.02The exemption review
    3. 1290.03Exemptions and structures
    4. 1290.04A worked exemption review

Chapter 13Retirement Assets

  1. ¶ 1301Overview
    1. 1301.01Scope of the chapter
    2. 1301.02Why retirement assets matter
    3. 1301.03How to read the chapter
    4. 1301.04The retirement inventory
    5. 1301.05Sources of protection
  2. ¶ 1310ERISA-Qualified Plans
    1. 1310.01The anti-alienation rule
    2. 1310.02Qualified plans in bankruptcy
    3. 1310.03The strength of the protection
    4. 1310.04Owner-only plans
    5. 1310.05Exceptions to ERISA protection
    6. 1310.06The federal government as creditor
    7. 1310.07Plan types
    8. 1310.08When a plan becomes an owner-only plan
    9. 1310.09The owner as plan fiduciary
    10. 1310.10Defined benefit and cash balance plans for older professionals
  3. ¶ 1320Individual Retirement Accounts
    1. 1320.01IRAs are not ERISA plans
    2. 1320.02IRAs in bankruptcy
    3. 1320.03IRAs outside bankruptcy
    4. 1320.04Rollovers
    5. 1320.05Moving between states with an IRA
    6. 1320.06SEP and SIMPLE IRAs
    7. 1320.07Roth conversions and protection
  4. ¶ 1330Inherited Retirement Accounts
    1. 1330.01The Supreme Court's decision
    2. 1330.02Trusts as beneficiaries of retirement accounts
    3. 1330.03Spousal rollovers
    4. 1330.04Inherited accounts under state law after Clark
    5. 1330.05Drafting the beneficiary trust
  5. ¶ 1340Distributions
    1. 1340.01Protection ends at distribution
    2. 1340.02Required minimum distributions
    3. 1340.03Loans from plans
    4. 1340.04Tracing protected distributions
    5. 1340.05Annuitizing within the plan
    6. 1340.06Withdrawals during a dispute
  6. ¶ 1350Nonqualified Deferred Compensation
    1. 1350.01Exposure to the employer's creditors
    2. 1350.02Exposure to the executive's creditors
    3. 1350.03Section 409A constraints
    4. 1350.04Planning for executives
    5. 1350.05Rabbi trusts and secular trusts compared
    6. 1350.06Equity compensation
  7. ¶ 1360How Protection Is Lost
    1. 1360.01Disqualification
    2. 1360.02Self-directed IRAs and checkbook IRAs
    3. 1360.03Excess and eve-of-bankruptcy contributions
    4. 1360.04Commingling and rollovers
    5. 1360.05Plan-level defects
    6. 1360.06Contributions and the conversion rules
  8. ¶ 1370Family Claimants
    1. 1370.01Qualified domestic relations orders
    2. 1370.02IRAs in divorce
    3. 1370.03Spousal rights in plans
    4. 1370.04Support and retirement assets outside the QDRO procedure
  9. ¶ 1380Foreign and Cross-Border Retirement Assets
    1. 1380.01U.S. accounts of non-resident clients
    2. 1380.02Foreign pensions of U.S. clients
    3. 1380.03Moving abroad
    4. 1380.04Foreign pensions and U.S. tax characterization
  10. ¶ 1390Retirement Assets in the Threat Matrix
    1. 1390.01Ratings
    2. 1390.02Planning points
    3. 1390.03Retirement assets and the rest of the plan
    4. 1390.04A worked retirement review
    5. 1390.05Retirement assets in the larger plan

Chapter 14Insurance: Liability Coverage, Captives and Their Limits

  1. ¶ 1401Overview
    1. 1401.01Scope of the chapter
    2. 1401.02Why insurance comes first
    3. 1401.03The limits of insurance
    4. 1401.04Insurance in the Threat Matrix
    5. 1401.05How to read the chapter
  2. ¶ 1410Insurance as the First Layer
    1. 1410.01The structure of a program
    2. 1410.02Occurrence and claims-made coverage
    3. 1410.03Defense costs
    4. 1410.04Why insurance is never a voidable transfer
    5. 1410.05Sizing limits
    6. 1410.06Insurer solvency
  3. ¶ 1420Personal Lines
    1. 1420.01The family's exposures
    2. 1420.02The personal umbrella
    3. 1420.03Property held in trusts and entities
    4. 1420.04High-net-worth programs
    5. 1420.05Household employees
    6. 1420.06Board service
    7. 1420.07Children, guests and social-host liability
  4. ¶ 1430Professional Liability
    1. 1430.01The professional's largest exposure
    2. 1430.02Terms that matter
    3. 1430.03Practice entities and vicarious liability
    4. 1430.04Tail coverage on retirement and transition
    5. 1430.05Damage caps and patient compensation funds
    6. 1430.06Going bare
    7. 1430.07Financial professionals and fiduciaries
  5. ¶ 1440Business Coverages
    1. 1440.01The business owner's program
    2. 1440.02Directors and officers insurance
    3. 1440.03The insured-versus-insured exclusion
    4. 1440.04Employment practices liability
    5. 1440.05Cyber liability
    6. 1440.06Personal guarantees and contract liability
  6. ¶ 1450Exclusions and Gaps
    1. 1450.01Intentional and criminal acts
    2. 1450.02Punitive damages
    3. 1450.03Fines, penalties and restitution
    4. 1450.04Business pursuits and professional services
    5. 1450.05Prior knowledge and late notice
    6. 1450.06Common gaps
  7. ¶ 1460The Insurer's Duties and the Insured's Leverage
    1. 1460.01The duty to defend
    2. 1460.02Reservation of rights
    3. 1460.03The duty to settle
    4. 1460.04Assignment of bad-faith claims and consent judgments
    5. 1460.05The insured's duties
    6. 1460.06Coverage litigation
  8. ¶ 1470Insurance and the Creditor
    1. 1470.01Insurance as the plaintiff's target
    2. 1470.02Disclosure of insurance
    3. 1470.03Direct action and garnishment of the policy
    4. 1470.04Policy proceeds in bankruptcy
    5. 1470.05Insurance and the voidable-transactions law
    6. 1470.06Settlement within limits as a protective outcome
  9. ¶ 1480Captive Insurance
    1. 1480.01What a captive is
    2. 1480.02Legitimate uses for closely held businesses
    3. 1480.03Section 831(b) micro-captives
    4. 1480.04What makes an arrangement insurance
    5. 1480.05The Tax Court's decisions
    6. 1480.06Listed transactions and reporting
    7. 1480.07The captive as a protective tool
    8. 1480.08Risk retention groups and physician-owned insurers
  10. ¶ 1490Insurance in the Threat Matrix
    1. 1490.01Ratings
    2. 1490.02Insurance and the other layers
    3. 1490.03The insurance review
    4. 1490.04The lesson of the chapter

Chapter 15Entities I: Inside and Outside Liability, Veil Piercing and Reverse Veil Piercing

  1. ¶ 1501Overview
    1. 1501.01Scope of the chapter
    2. 1501.02Why entities matter
    3. 1501.03The limits of entities
    4. 1501.04Entities in the Threat Matrix
    5. 1501.05How to read the chapter
  2. ¶ 1510Inside and Outside Liability
    1. 1510.01Two directions of protection
    2. 1510.02The forms of entity
    3. 1510.03Limited liability in the statutes
    4. 1510.04Outside liability and the owner's equity
    5. 1510.05Limited liability and its policy
  3. ¶ 1520Choice of Entity
    1. 1520.01The protective criteria
    2. 1520.02The LLC as the default
    3. 1520.03Limited partnerships
    4. 1520.04Professional entities
    5. 1520.05Choice of state
    6. 1520.06Foreign entities
    7. 1520.07Moving an existing business into an entity
  4. ¶ 1530Veil Piercing
    1. 1530.01The doctrine
    2. 1530.02The factors
    3. 1530.03Undercapitalization
    4. 1530.04Piercing in contract cases
    5. 1530.05Piercing LLCs
    6. 1530.06Procedure
    7. 1530.07Piercing and consolidation in bankruptcy
  5. ¶ 1540Enterprise and Single-Business Theories
    1. 1540.01Horizontal piercing
    2. 1540.02Rejection in some states
    3. 1540.03Parents and subsidiaries
  6. ¶ 1550Reverse Veil Piercing
    1. 1550.01Insider and outsider reverse piercing
    2. 1550.02The courts divided
    3. 1550.03Reverse piercing of family LLCs
    4. 1550.04Reducing reverse-piercing risk
    5. 1550.05Reverse piercing by the government
  7. ¶ 1560Segregating Risk
    1. 1560.01The principle
    2. 1560.02Common structures
    3. 1560.03Capital and insurance for each entity
    4. 1560.04Intercompany dealings
    5. 1560.05Guarantees among related entities
    6. 1560.06The cost of complexity
    7. 1560.07Series LLCs as an alternative
  8. ¶ 1570Formalities and Operation
    1. 1570.01Why operation matters
    2. 1570.02The operating checklist
    3. 1570.03Signing in the right capacity
    4. 1570.04Personal use of entity property
    5. 1570.05Loss of good standing
    6. 1570.06The entity in litigation
  9. ¶ 1580Personal Liability That Entities Cannot Shield
    1. 1580.01The categories
    2. 1580.02The owner's own torts
    3. 1580.03Trust fund taxes
    4. 1580.04Guarantees
    5. 1580.05Fraud and the use of entities to evade obligations
    6. 1580.06Supervising professionals
    7. 1580.07Spouses and family members in the business
  10. ¶ 1590Entities in the Threat Matrix
    1. 1590.01Ratings
    2. 1590.02The design checklist
    3. 1590.03Entities and the rest of the plan
    4. 1590.04The lesson of the chapter

Chapter 16Entities II: The Charging Order, Exclusivity, Single-Member and Series LLCs

  1. ¶ 1601Overview
    1. 1601.01Scope of the chapter
    2. 1601.02Why the charging order matters
    3. 1601.03The limits of the charging order
    4. 1601.04Charging-order protection in the Threat Matrix
    5. 1601.05How to read the chapter
  2. ¶ 1610The Charging Order
    1. 1610.01Origins
    2. 1610.02What the order gives the creditor
    3. 1610.03The policy
    4. 1610.04Tax consequences for the creditor
    5. 1610.05Procedure
    6. 1610.06Corporations compared
    7. 1610.07The debtor's other rights against the entity
  3. ¶ 1620Exclusivity and Choice of Law
    1. 1620.01Exclusive and non-exclusive statutes
    2. 1620.02The meaning of exclusivity
    3. 1620.03Which state's law applies
    4. 1620.04Reducing the choice-of-law risk
    5. 1620.05Domestication and service on the entity
  4. ¶ 1630Single-Member LLCs
    1. 1630.01The problem
    2. 1630.02Single-member LLCs in bankruptcy
    3. 1630.03Adding members
    4. 1630.04Disregarded entities and tax
    5. 1630.05Statutes protecting single-member LLCs
    6. 1630.06Spouses as the two members
  5. ¶ 1640Foreclosure, Receivers and Other Remedies
    1. 1640.01Foreclosure of the charged interest
    2. 1640.02Receivers
    3. 1640.03Attacks on the contribution and the entity
    4. 1640.04The manager's duties
    5. 1640.05Settlement leverage
    6. 1640.06Discovery against the entity
    7. 1640.07Distributions in kind and on dissolution
  6. ¶ 1650Series LLCs
    1. 1650.01The structure
    2. 1650.02Uses
    3. 1650.03Risks
    4. 1650.04Planning guidance
    5. 1650.05Registered and protected series
  7. ¶ 1660Bankruptcy and the LLC Interest
    1. 1660.01The interest enters the estate
    2. 1660.02Economic rights and governance rights
    3. 1660.03The trustee's other weapons
    4. 1660.04Exemptions for LLC interests
    5. 1660.05Reorganization cases
    6. 1660.06Entities formed in contemplation of bankruptcy
  8. ¶ 1670Family Limited Partnerships and LLCs
    1. 1670.01The structure
    2. 1670.02Protective features
    3. 1670.03The tax cases and their protective lessons
    4. 1670.04Funding and the voidable-transactions law
    5. 1670.05The senior generation's own creditors
    6. 1670.06Divorce and the family entity
  9. ¶ 1680Drafting the Operating Agreement
    1. 1680.01The agreement as the protective instrument
    2. 1680.02Provisions to avoid
    3. 1680.03Operating the agreement
    4. 1680.04Limited partnership agreements
    5. 1680.05Coordinating the entity with trusts
  10. ¶ 1690Charging-Order Protection in the Threat Matrix
    1. 1690.01Ratings
    2. 1690.02The C3 spouse and the C5 sovereign
    3. 1690.03The design checklist
    4. 1690.04The lesson of the chapter
    5. 1690.05Questions at intake

Chapter 17Third-Party Trusts: Spendthrift, Discretionary, Dynasty and SLATs

  1. ¶ 1701Overview
    1. 1701.01Scope of the chapter
    2. 1701.02Why the third-party trust is the strongest structure
    3. 1701.03The vocabulary
    4. 1701.04Sources of law
    5. 1701.05The planning question
  2. ¶ 1710The Spendthrift Trust
    1. 1710.01Definition and effect
    2. 1710.02Origins in American law
    3. 1710.03What the provision must say
    4. 1710.04The protective trust and forfeiture provisions
    5. 1710.05Spendthrift protection and the Bankruptcy Code
    6. 1710.06Remainder interests and contingent interests
    7. 1710.07The settlor's estate plan as the beneficiary's protection
  3. ¶ 1720Discretionary and Support Trusts
    1. 1720.01The continuum of interests
    2. 1720.02The classification under the Restatement (Second)
    3. 1720.03The Restatement (Third) and the collapse of the distinction
    4. 1720.04The Uniform Trust Code rule
    5. 1720.05Nonuniform statutes
    6. 1720.06Drafting the discretionary standard
    7. 1720.07The duty to exercise discretion
  4. ¶ 1730Exception Creditors
    1. 1730.01The Uniform Trust Code exceptions
    2. 1730.02Child support and alimony
    3. 1730.03Tort creditors
    4. 1730.04Federal tax liens and federal claims
    5. 1730.05State claims, public benefits and services
    6. 1730.06Variation among the states
    7. 1730.07The settlor as beneficiary
  5. ¶ 1740The Beneficiary's Own Powers
    1. 1740.01Control and protection
    2. 1740.02The beneficiary as trustee
    3. 1740.03Powers of appointment
    4. 1740.04Withdrawal rights
    5. 1740.05The beneficiary's power to remove and replace
    6. 1740.06The beneficiary's power to direct investments and manage entities
  6. ¶ 1750Distributions and Their Aftermath
    1. 1750.01Distributed property belongs to the beneficiary
    2. 1750.02Overdue mandatory distributions
    3. 1750.03Use of trust property in kind
    4. 1750.04Loans to beneficiaries
    5. 1750.05Trustee liability after notice
    6. 1750.06The beneficiary's own assets after distribution
    7. 1750.07Distributions and the bankruptcy estate
  7. ¶ 1760The Beneficiary's Divorce
    1. 1760.01The divorcing spouse as creditor
    2. 1760.02Inherited property as separate property
    3. 1760.03The discretionary interest as a mere expectancy
    4. 1760.04The trust as a factor in alimony and support
    5. 1760.05Drafting for the beneficiary's marriage
    6. 1760.06The beneficiary's spouse as beneficiary
  8. ¶ 1770Dynasty Trusts
    1. 1770.01Definition and purpose
    2. 1770.02The rule against perpetuities and its repeal
    3. 1770.03Generation-skipping transfer tax
    4. 1770.04The protective value across generations
    5. 1770.05Situs, administration and state income tax
    6. 1770.06Flexibility over time
    7. 1770.07Policy risk
  9. ¶ 1780Spousal Lifetime Access Trusts
    1. 1780.01Structure and purpose
    2. 1780.02Protection against each spouse's creditors
    3. 1780.03Indirect benefit through the spouse
    4. 1780.04The reciprocal trust doctrine
    5. 1780.05Avoiding reciprocity
    6. 1780.06Divorce and the donor spouse
    7. 1780.07Community property
    8. 1780.08The income tax burden and reimbursement
  10. ¶ 1790Third-Party Trusts in the Threat Matrix
    1. 1790.01Ratings
    2. 1790.02Timing
    3. 1790.03The design checklist
    4. 1790.04Reviewing existing trusts

Chapter 18Self-Settled Trusts: From the Restatement Rule to the Modern Statutes

  1. ¶ 1801Overview
    1. 1801.01Scope of the chapter
    2. 1801.02The policy debate
    3. 1801.03The settlor's three questions
  2. ¶ 1810The Common-Law Rule
    1. 1810.01Statement of the rule
    2. 1810.02Origins
    3. 1810.03Who is a settlor
    4. 1810.04Partly self-settled trusts
    5. 1810.05The revocable trust
    6. 1810.06The common-law rule today
  3. ¶ 1820The Domestic Asset Protection Trust Statutes
    1. 1820.01History
    2. 1820.02Common elements
    3. 1820.03Interests and powers the settlor may retain
    4. 1820.04The creditor's remedy under the statutes
    5. 1820.05Exception creditors
  4. ¶ 1830The Statutes Compared
    1. 1830.01The principal variables
    2. 1830.02The limitations period
    3. 1830.03The spousal exception
    4. 1830.04Solvency affidavits
    5. 1830.05Choosing among the DAPT states
  5. ¶ 1840Conflict of Laws
    1. 1840.01The problem
    2. 1840.02Validity of the trust against creditors
    3. 1840.03The voidable transfer claim
    4. 1840.04Exclusive jurisdiction clauses
    5. 1840.05Full faith and credit and enforcement
    6. 1840.06Assets in the home state
  6. ¶ 1850Bankruptcy and § 548(e)
    1. 1850.01The trust and the bankruptcy estate
    2. 1850.02Section 548(e)
    3. 1850.03Avoiding bankruptcy
    4. 1850.04Discharge and the settlor's conduct
  7. ¶ 1860Other Lines of Attack
    1. 1860.01The creditor's toolkit
    2. 1860.02The common-law rule as an independent claim
    3. 1860.03Sham and alter ego
    4. 1860.04Contempt and the settlor's own conduct
    5. 1860.05Federal claimants
    6. 1860.06Divorce
  8. ¶ 1870Hybrid Structures
    1. 1870.01The idea
    2. 1870.02The hybrid DAPT
    3. 1870.03The special power of appointment trust
    4. 1870.04Risks of hybrid structures
    5. 1870.05Incomplete gift non-grantor trusts
    6. 1870.06The domestic and the offshore trust
  9. ¶ 1880Designing and Administering the Trust
    1. 1880.01The suitable client
    2. 1880.02The trustee
    3. 1880.03The settlor's retained powers
    4. 1880.04Funding
    5. 1880.05Solvency and due diligence
    6. 1880.06Tax treatment
    7. 1880.07Administration
    8. 1880.08Review and the settlor's later conduct
  10. ¶ 1890Self-Settled Trusts in the Threat Matrix
    1. 1890.01Ratings
    2. 1890.02Timing
    3. 1890.03The design checklist

Chapter 19Trust Governance: Directed Trusts, Protectors, Decanting and Private Trust Companies

  1. ¶ 1901Overview
    1. 1901.01Scope of the chapter
    2. 1901.02The traditional model and its limits
    3. 1901.03The protective principle
  2. ¶ 1910Directed Trusts
    1. 1910.01Definition
    2. 1910.02The common structures
    3. 1910.03Duties and liability of the directed trustee
    4. 1910.04Duties and liability of the trust director
    5. 1910.05Directed trusts and asset protection
    6. 1910.06The investment adviser who is a beneficiary
  3. ¶ 1920Trust Protectors
    1. 1920.01Origins and definition
    2. 1920.02Typical powers
    3. 1920.03Fiduciary or nonfiduciary
    4. 1920.04Who should serve
    5. 1920.05Tax effects of protector powers
    6. 1920.06The protector as a protective tool
    7. 1920.07Abuse of protector powers and the protector's removal
  4. ¶ 1930Duress, Flight and Change of Situs
    1. 1930.01The duress clause
    2. 1930.02The flight or migration clause
    3. 1930.03The contempt risk
    4. 1930.04Designing duress provisions for domestic trusts
    5. 1930.05Changing situs to strengthen protection
  5. ¶ 1940Decanting
    1. 1940.01Definition and origins
    2. 1940.02The scope of the power
    3. 1940.03Notice and fiduciary duty
    4. 1940.04Protective uses
    5. 1940.05Decanting and the beneficiary's divorce
    6. 1940.06Decanting after a claim arises
  6. ¶ 1950Modification and Reformation
    1. 1950.01The Uniform Trust Code's modification provisions
    2. 1950.02Protective uses and their limits
    3. 1950.03Division and combination
    4. 1950.04Tax constraints
  7. ¶ 1960Private Trust Companies
    1. 1960.01Definition
    2. 1960.02Advantages
    3. 1960.03The tax framework
    4. 1960.04Asset protection considerations
    5. 1960.05The family office alongside the trust company
    6. 1960.06Alternatives to a private trust company
  8. ¶ 1970Independence and the Settlor's Control
    1. 1970.01Control as the creditor's central theory
    2. 1970.02Indicia of control
    3. 1970.03The related or subordinate test as a benchmark
    4. 1970.04The family trustee
    5. 1970.05Independence in practice
  9. ¶ 1980Governance Documents and Practice
    1. 1980.01The documents beyond the instrument
    2. 1980.02The letter of wishes
    3. 1980.03The distribution policy
    4. 1980.04Minutes and records
    5. 1980.05Investment policy and the family business
    6. 1980.06Beneficiary education and family governance
    7. 1980.07The annual review
  10. ¶ 1990Governance in the Threat Matrix
    1. 1990.01Ratings
    2. 1990.02Timing
    3. 1990.03The governance checklist

Chapter 20Intrafamily Transfers and the Gifting Question

  1. ¶ 2001Overview
    1. 2001.01Scope of the chapter
    2. 2001.02Why the gift is the weak point
    3. 2001.03The gifting question stated
  2. ¶ 2010The Gift as a Transfer
    1. 2010.01Constructive fraud
    2. 2010.02Actual intent
    3. 2010.03Who is liable: the donee
    4. 2010.04The limitations period
    5. 2010.05What counts as the transfer
    6. 2010.06The gift in the donor's bankruptcy
  3. ¶ 2020Solvency and the Gifting Budget
    1. 2020.01The tests
    2. 2020.02Exempt assets are excluded
    3. 2020.03Contingent liabilities
    4. 2020.04The gifting budget
    5. 2020.05Serial gifts
  4. ¶ 2030Transfers Between Spouses
    1. 2030.01The exposed spouse and the protected spouse
    2. 2030.02Forms of interspousal transfer
    3. 2030.03The divorce risk
    4. 2030.04The protected spouse's own exposure
    5. 2030.05Marital agreements as transfers
    6. 2030.06The exposed spouse's continued benefit
    7. 2030.07Conversion to tenancy by the entirety
  5. ¶ 2040Gifts to Children and Trusts
    1. 2040.01Outright gifts to adult children
    2. 2040.02Gifts to minors
    3. 2040.03Gifts to trusts
    4. 2040.04The donor's continued use
    5. 2040.05Paying for children's needs
    6. 2040.06Gifts to grandchildren
  6. ¶ 2050Sales and Loans Within the Family
    1. 2050.01Value as the defense
    2. 2050.02The installment sale to a grantor trust
    3. 2050.03Self-canceling notes and private annuities
    4. 2050.04Intrafamily loans
    5. 2050.05Forgiveness
    6. 2050.06Part-sale, part-gift transactions
  7. ¶ 2060Family Entities and Valuation Discounts
    1. 2060.01The family entity gift program
    2. 2060.02The contribution as a transfer
    3. 2060.03The estate tax cases and what they teach
    4. 2060.04Designing the entity for both purposes
    5. 2060.05Gifts by agents and late-life transfers
  8. ¶ 2070The Transfer Tax Framework
    1. 2070.01The exemptions
    2. 2070.02Transfer tax and asset protection aligned
    3. 2070.03The cost in basis
    4. 2070.04Anti-clawback and the timing of large gifts
    5. 2070.05The gift tax return as evidence
    6. 2070.06State transfer taxes
  9. ¶ 2080Documentation and the Record
    1. 2080.01The record as the defense
    2. 2080.02The gift file
    3. 2080.03The donor's statements
    4. 2080.04Completing the transfer
    5. 2080.05The trustee's role
  10. ¶ 2090Intrafamily Transfers in the Threat Matrix
    1. 2090.01Ratings
    2. 2090.02Timing
    3. 2090.03The gifting checklist

Part IV: The Jurisdictions

Chapter 21Comparative Method: How to Evaluate a Jurisdiction

  1. ¶ 2101Overview
    1. 2101.01Scope of Part IV
    2. 2101.02Why a method
    3. 2101.03The organizing question
  2. ¶ 2110The Evaluation Framework
    1. 2110.01The seven dimensions
    2. 2110.02Weighting by threat
    3. 2110.03The domestic and the foreign jurisdiction compared
    4. 2110.04The structure determines the questions
    5. 2110.05Sources for the evaluation
    6. 2110.06The non-U.S. client
  3. ¶ 2120Substantive Trust and Transfer Law
    1. 2120.01Recognition of the structure
    2. 2120.02The fraudulent transfer rule
    3. 2120.03Firewall provisions
    4. 2120.04Recognition of governance devices
    5. 2120.05Recognition of foreign judgments
    6. 2120.06Other structures available
    7. 2120.07Marital, heirship and support claims
    8. 2120.08Protection for trustees and advisers
  4. ¶ 2130Litigation Barriers
    1. 2130.01The creditor's journey
    2. 2130.02Procedural barriers
    3. 2130.03The reach of U.S. courts
    4. 2130.04Fiduciaries and assets with a U.S. nexus
    5. 2130.05Cooperation with foreign insolvency proceedings
  5. ¶ 2140Courts and the Record of Decisions
    1. 2140.01Why the record matters
    2. 2140.02The structure of the courts
    3. 2140.03The leading test cases
    4. 2140.04Untested jurisdictions
    5. 2140.05The record in American courts
    6. 2140.06Proving foreign law in American courts
  6. ¶ 2150Stability, Reputation and International Pressure
    1. 2150.01Political and constitutional stability
    2. 2150.02Legislative stability
    3. 2150.03International standards and lists
    4. 2150.04Transparency and protection
    5. 2150.05Reputation and banking
    6. 2150.06Sanctions and political risk
    7. 2150.07Exit and migration
  7. ¶ 2160Practical Infrastructure
    1. 2160.01Trustees
    2. 2160.02Banking and custody
    3. 2160.03Professional services
    4. 2160.04Cost
    5. 2160.05Practicalities
    6. 2160.06Interviewing the trustee
    7. 2160.07Promoters and packaged structures
  8. ¶ 2170The U.S. Tax and Reporting Interface
    1. 2170.01Classification
    2. 2170.02Grantor trust status
    3. 2170.03Reporting obligations
    4. 2170.04Gift and estate tax
    5. 2170.05At the settlor's death
    6. 2170.06Investments held by the trust
    7. 2170.07Beneficiaries, state taxes and records
  9. ¶ 2180Applying the Framework
    1. 2180.01The process
    2. 2180.02The reference jurisdictions
    3. 2180.03The domestic option for a resident of a DAPT state
    4. 2180.04The client in a non-DAPT state
    5. 2180.05A worked scoring
  10. ¶ 2190Jurisdictions in the Threat Matrix
    1. 2190.01Ratings
    2. 2190.02Timing
    3. 2190.03The evaluation checklist

Chapter 22The Cook Islands

  1. ¶ 2201Overview
    1. 2201.01Why the Cook Islands
    2. 2201.02The jurisdiction
    3. 2201.03Scope of the chapter
    4. 2201.04A note on sources
  2. ¶ 2210The International Trusts Act Framework
    1. 2210.01Legislative history
    2. 2210.02The international trust
    3. 2210.03Registration
    4. 2210.04Confidentiality
    5. 2210.05Irrevocability and settlor powers
    6. 2210.06Change of governing law
    7. 2210.07The suitable client
  3. ¶ 2220Fraudulent Dispositions
    1. 2220.01The elements
    2. 2220.02The solvency safe harbor
    3. 2220.03The limitation rules
    4. 2220.04The rules applied
    5. 2220.05Further protections
    6. 2220.06What the creditor recovers
    7. 2220.07Two analyses, two forums
  4. ¶ 2230Foreign Judgments, Bankruptcy and Family Claims
    1. 2230.01Foreign judgments
    2. 2230.02Bankruptcy
    3. 2230.03Heirship and personal relationship claims
    4. 2230.04Spendthrift and governing law
    5. 2230.05Criminal proceeds and government claims
    6. 2230.06The American judgment as evidence
  5. ¶ 2240Trustees, Protectors and Duress
    1. 2240.01Trustee companies
    2. 2240.02Protectors
    3. 2240.03Duress provisions
    4. 2240.04The trustee's response to a claim
    5. 2240.05Changing or losing the trustee
    6. 2240.06Distributions in practice
  6. ¶ 2250The Cases
    1. 2250.01The record
    2. 2250.02The Anderson litigation
    3. 2250.03Other Cook Islands decisions
    4. 2250.04American decisions
    5. 2250.05What the record teaches
  7. ¶ 2260Companies, LLCs and Foundations
    1. 2260.01International companies
    2. 2260.02The Limited Liability Companies Act 2008
    3. 2260.03The trust-and-LLC structure
    4. 2260.04Foundations
    5. 2260.05Relationship property trusts
    6. 2260.06Who manages the LLC
  8. ¶ 2270Banking and Practice
    1. 2270.01Where the assets are held
    2. 2270.02Assets that cannot leave the United States
    3. 2270.03The "springing" structure
    4. 2270.04The steps to establish a Cook Islands trust
    5. 2270.05Cost
    6. 2270.06Assets suited to a Cook Islands structure
  9. ¶ 2280Regulation, Transparency and U.S. Reporting
    1. 2280.01Anti-money laundering
    2. 2280.02Tax transparency
    3. 2280.03Implications for the client
    4. 2280.04U.S. reporting
    5. 2280.05At the settlor's death
    6. 2280.06The Cook Islands compared
  10. ¶ 2290The Cook Islands in the Threat Matrix
    1. 2290.01Ratings
    2. 2290.02Timing
    3. 2290.03The Cook Islands checklist

Chapter 23Nevis

  1. ¶ 2301Overview
    1. 2301.01Why Nevis
    2. 2301.02The jurisdiction
    3. 2301.03Scope of the chapter
    4. 2301.04Sources
    5. 2301.05The suitable client
  2. ¶ 2310The Nevis International Exempt Trust Ordinance
    1. 2310.01History and amendments
    2. 2310.02The international trust
    3. 2310.03Registration and confidentiality
    4. 2310.04Validity against foreign law
    5. 2310.05Foreign judgments
    6. 2310.06Qualified foreign trusts
    7. 2310.07Duration and termination
  3. ¶ 2320Fraudulent Dispositions
    1. 2320.01The elements
    2. 2320.02The solvency safe harbor
    3. 2320.03The limitation rules
    4. 2320.04The paradox of the one-year rule
    5. 2320.05Further protections
    6. 2320.06The remedy
    7. 2320.07The American analysis runs in parallel
    8. 2320.08Evidence in Nevis proceedings
  4. ¶ 2330The Bond and Other Litigation Barriers
    1. 2330.01The bond
    2. 2330.02The effect of the bond
    3. 2330.03Other barriers
    4. 2330.04Government creditors
    5. 2330.05Costs in practice
    6. 2330.06The trustee's response to a claim
  5. ¶ 2340Settlor Powers, Protectors and Duress
    1. 2340.01What the settlor may retain
    2. 2340.02Why the settlor should retain little
    3. 2340.03Protectors
    4. 2340.04Duress
    5. 2340.05Change of governing law
    6. 2340.06The letter of wishes and distributions
  6. ¶ 2350The Nevis LLC
    1. 2350.01The 2017 Ordinance
    2. 2350.02The charging order
    3. 2350.03The bond and the fraudulent transfer rule
    4. 2350.04Redomiciliation and taxation
    5. 2350.05The Nevis LLC on its own
    6. 2350.06Drafting the Nevis operating agreement
    7. 2350.07The three-year limit and American courts
    8. 2350.08Two transfers, two rules
  7. ¶ 2360Courts, Cases and the Constitution
    1. 2360.01The courts
    2. 2360.02The cases
    3. 2360.03Other decisions
    4. 2360.04The constitutional position
    5. 2360.05What the record teaches
    6. 2360.06The significance of the regional court
  8. ¶ 2370Regulation, Transparency and U.S. Reporting
    1. 2370.01The regulator and service providers
    2. 2370.02Anti-money laundering
    3. 2370.03Tax transparency and international lists
    4. 2370.04U.S. reporting
    5. 2370.05Beneficial ownership and the Corporate Transparency Act
    6. 2370.06Nevis taxation of trusts
  9. ¶ 2380Structuring with Nevis
    1. 2380.01The Nevis trust with a Nevis LLC
    2. 2380.02A Nevis LLC under a trust elsewhere
    3. 2380.03Redomiciling a domestic LLC
    4. 2380.04The multiform foundation
    5. 2380.05Cost and practice
    6. 2380.06Nevis and the Cook Islands compared
    7. 2380.07Moving an existing structure to Nevis
  10. ¶ 2390Nevis in the Threat Matrix
    1. 2390.01Ratings
    2. 2390.02Timing
    3. 2390.03The Nevis checklist
    4. 2390.04When Nevis is the wrong choice

Chapter 24Belize

  1. ¶ 2401Overview
    1. 2401.01Why Belize
    2. 2401.02The jurisdiction
    3. 2401.03Scope of the chapter
    4. 2401.04Sources and a caution
    5. 2401.05The suitable client
  2. ¶ 2410The Trusts Act Framework
    1. 2410.01History and amendments
    2. 2410.02The international trust
    3. 2410.03Registration as a condition of protection
    4. 2410.04Confidentiality and beneficial ownership
    5. 2410.05Taxation
    6. 2410.06Trustees and the court
    7. 2410.07Domestic and international trusts
    8. 2410.08Letters of wishes and trustee confidentiality
  3. ¶ 2420Section 7
    1. 2420.01The text
    2. 2420.02What section 7(6) does
    3. 2420.03The limits of section 7(6)
    4. 2420.04Why Belize has no fraudulent-disposition code
    5. 2420.05Section 7 compared
    6. 2420.06"The claims of creditors in an insolvency."
    7. 2420.07Invalidity for fraud or public policy
    8. 2420.08The proper law of the trust
    9. 2420.09Section 7 applied to four claimants
  4. ¶ 2430The Creditor's Position in Belize
    1. 2430.01The path of a creditor
    2. 2430.02Enforcement of foreign judgments
    3. 2430.03The creditor's claim against the trust
    4. 2430.04Practical barriers
    5. 2430.05Section 149 of the Law of Property Act
    6. 2430.06Freezing orders
    7. 2430.07Settlement dynamics
  5. ¶ 2440Settlor Powers, Protectors and Migration
    1. 2440.01The settlor's position
    2. 2440.02Protective trusts
    3. 2440.03Protectors
    4. 2440.04No statutory duress provision
    5. 2440.05Change of proper law
    6. 2440.06The court's supervisory powers
    7. 2440.07Purpose trusts
    8. 2440.08Trustee succession
  6. ¶ 2450The Cases
    1. 2450.01The record
    2. 2450.02Other reported matters
    3. 2450.03What the record teaches
    4. 2450.04Drafting lessons from Rensin
    5. 2450.05How American courts approach a Belize trust
  7. ¶ 2460Foundations, LLCs and Companies
    1. 2460.01International foundations
    2. 2460.02International LLCs
    3. 2460.03Companies and the end of the IBC regime
    4. 2460.04Choosing the entity
    5. 2460.05Foundation or trust
  8. ¶ 2470Courts, Regulation and International Standing
    1. 2470.01The courts
    2. 2470.02The regulator
    3. 2470.03International standing
    4. 2470.04Political and economic considerations
    5. 2470.05Due diligence at intake
  9. ¶ 2480Structuring with Belize and U.S. Reporting
    1. 2480.01When Belize fits
    2. 2480.02The standard structure
    3. 2480.03Belize combined with other jurisdictions
    4. 2480.04U.S. reporting
    5. 2480.05Reviewing an existing Belize trust
    6. 2480.06Cost
    7. 2480.07A Belize trust with a Nevis or Cook Islands LLC
  10. ¶ 2490Belize in the Threat Matrix
    1. 2490.01Ratings
    2. 2490.02Timing
    3. 2490.03The Belize checklist
    4. 2490.04When Belize is the wrong choice

Chapter 25Switzerland

  1. ¶ 2501Overview
    1. 2501.01Why Switzerland
    2. 2501.02The jurisdiction
    3. 2501.03Scope of the chapter
    4. 2501.04Sources
    5. 2501.05The suitable client
  2. ¶ 2510Trusts in Swiss Law
    1. 2510.01No Swiss trust
    2. 2510.02The Hague Trust Convention
    3. 2510.03The implementing legislation
    4. 2510.04What the Convention does not do for the settlor
    5. 2510.05Ownership of trust assets
    6. 2510.06Family foundations
    7. 2510.07The Convention's reservations for mandatory rules
    8. 2510.08Swiss trustees
  3. ¶ 2520Creditors' Remedies in Switzerland
    1. 2520.01The Swiss enforcement system
    2. 2520.02Attachment
    3. 2520.03The avoidance actions
    4. 2520.04The avoidance actions and a trust
    5. 2520.05Foreign bankruptcy proceedings
    6. 2520.06Swiss avoidance compared with American law
    7. 2520.07Attachment in practice
  4. ¶ 2530Recognition of American Judgments
    1. 2530.01No treaty
    2. 2530.02The conditions
    3. 2530.03Damages and public policy
    4. 2530.04Procedure
    5. 2530.05The judgment and the trust
    6. 2530.06Jurisdiction over the trustee
    7. 2530.07The cost of Swiss proceedings
  5. ¶ 2540Swiss Life Insurance
    1. 2540.01The protective provisions
    2. 2540.02The limits
    3. 2540.03Use in planning
    4. 2540.04Annuities and pension products
    5. 2540.05Ownership of a protected policy
  6. ¶ 2550The Cases
    1. 2550.01The Federal Supreme Court and foreign trusts
    2. 2550.02The irrevocable discretionary structure upheld
    3. 2550.03What the cases teach
    4. 2550.04Lessons for the planner
  7. ¶ 2560Banking, Secrecy and the United States
    1. 2560.01Bank secrecy today
    2. 2560.02The Swiss Bank Program
    3. 2560.03FATCA
    4. 2560.04The Common Reporting Standard
    5. 2560.05Choosing a Swiss bank for a protective structure
    6. 2560.06Opening the account
    7. 2560.07Bank failure and custody
  8. ¶ 2570Foreign Orders, Discovery and Legal Assistance
    1. 2570.01The blocking provisions
    2. 2570.02Evidence and service
    3. 2570.03Freezing orders and criminal assistance
    4. 2570.04International standing
    5. 2570.05Responding to an American subpoena
    6. 2570.06Tax information exchange
    7. 2570.07Swiss accounts and American reporting
  9. ¶ 2580Using Switzerland in a Plan
    1. 2580.01Three roles
    2. 2580.02Custody for an offshore trust
    3. 2580.03A Swiss trustee or protector
    4. 2580.04Swiss tax treatment of trusts with foreign settlors
    5. 2580.05Insurance
    6. 2580.06Liechtenstein compared
    7. 2580.07Switzerland for non-American families
  10. ¶ 2590Switzerland in the Threat Matrix
    1. 2590.01Ratings
    2. 2590.02Timing
    3. 2590.03The Switzerland checklist
    4. 2590.04When Switzerland is the wrong choice

Chapter 26Wyoming

  1. ¶ 2601Overview
    1. 2601.01Why Wyoming
    2. 2601.02Domestic jurisdiction, domestic limits
    3. 2601.03Scope of the chapter
    4. 2601.04Sources
  2. ¶ 2610The Foundations of Wyoming Trust Law
    1. 2610.01The Uniform Trust Code, as Wyoming has modified it
    2. 2610.02Spendthrift provisions
    3. 2610.03Exception creditors
    4. 2610.04Discretionary interests
    5. 2610.05The settlor's creditors: the general rule and its two exceptions
    6. 2610.06Foreign judgments and foreign law
    7. 2610.07Privacy and silent trusts
    8. 2610.08Duration
  3. ¶ 2620The Qualified Spendthrift Trust
    1. 2620.01Nature and history
    2. 2620.02The instrument
    3. 2620.03The qualified trustee
    4. 2620.04What the settlor may retain
    5. 2620.05The qualified transfer and the affidavit
    6. 2620.06Existing trusts and transfers from other states
    7. 2620.07The settlor as investment adviser
  4. ¶ 2630Creditors and the Qualified Spendthrift Trust
    1. 2630.01The exclusive remedy
    2. 2630.02The notice-based limitation period
    3. 2630.03Exception creditors
    4. 2630.04The remedy if a creditor succeeds
    5. 2630.05The qualified spendthrift trust and bankruptcy
    6. 2630.06Giving notice in practice
  5. ¶ 2640The Irrevocable Discretionary Trust
    1. 2640.01A second protected trust
    2. 2640.02The statute
    3. 2640.03The requirements
    4. 2640.04What creditors can reach
    5. 2640.05The limitation period
    6. 2640.06Exception creditors
    7. 2640.07History
    8. 2640.08Drafting the irrevocable discretionary trust
    9. 2640.09The settlor's divorce
  6. ¶ 2650Choosing Between the Two Protected Trusts
    1. 2650.01The two trusts compared
    2. 2650.02When to use the qualified spendthrift trust
    3. 2650.03When to use the irrevocable discretionary trust
    4. 2650.04Tax design
    5. 2650.05A trust that satisfies both
  7. ¶ 2660Governance and Private Trust Companies
    1. 2660.01Protectors, advisers and directed trusts
    2. 2660.02Decanting and tax reimbursement
    3. 2660.03Nonjudicial settlement
    4. 2660.04Private trust companies
    5. 2660.05Silent trusts and beneficiary information
  8. ¶ 2670The Wyoming LLC and Other Entities
    1. 2670.01The charging order
    2. 2670.02Veil piercing and the 2016 statute
    3. 2670.03Other entities
    4. 2670.04The Wyoming LLC beneath a Wyoming trust
    5. 2670.05The charging order in bankruptcy
  9. ¶ 2680Nonresidents, Conflict of Laws and Tax
    1. 2680.01The Wyoming resident
    2. 2680.02The nonresident
    3. 2680.03Judgments from other states
    4. 2680.04The irrevocable discretionary trust in another state's court
    5. 2680.05Taxation
    6. 2680.06Transparency
    7. 2680.07Moving to Wyoming
  10. ¶ 2690Wyoming in the Threat Matrix
    1. 2690.01Ratings
    2. 2690.02Timing
    3. 2690.03The Wyoming checklist

Chapter 27Delaware

  1. ¶ 2701Overview
    1. 2701.01Why Delaware
    2. 2701.02Domestic jurisdiction, domestic limits
    3. 2701.03What distinguishes Delaware from Wyoming
    4. 2701.04Scope of the chapter
    5. 2701.05Sources
  2. ¶ 2710The Foundations of Delaware Trust Law
    1. 2710.01Delaware's trust code
    2. 2710.02Spendthrift provisions
    3. 2710.03No general exception creditors
    4. 2710.04Discretionary interests
    5. 2710.05The settlor's creditors: the general rule
    6. 2710.06Safe harbors from the self-settled rule
    7. 2710.07Perpetuities
    8. 2710.08Delaware's fraudulent transfer law
    9. 2710.09Delaware criminal law
  3. ¶ 2720The Qualified Disposition
    1. 2720.01History and structure of the Act
    2. 2720.02The protected transfer
    3. 2720.03The qualified trustee
    4. 2720.04Advisers and protectors
    5. 2720.05The trust instrument
    6. 2720.06The settlor's permitted interests and powers
    7. 2720.07No greater rights
    8. 2720.08Tax design within the Act
  4. ¶ 2730Creditors and the Qualified Disposition
    1. 2730.01The general bar
    2. 2730.02Existing and later creditors
    3. 2730.03The limitation periods
    4. 2730.04Clear and convincing evidence
    5. 2730.05The exception creditors
    6. 2730.06The spousal waiver
    7. 2730.07Effect of avoidance
    8. 2730.08Protection of trustees, advisers and planners
    9. 2730.09Additions and earlier trusts
    10. 2730.10The automatic trustee change
  5. ¶ 2740Litigation, Conflict of Laws and Bankruptcy
    1. 2740.01Three forums
    2. 2740.02Choice of law in the Court of Chancery
    3. 2740.03Exclusive jurisdiction
    4. 2740.04Courts in other states
    5. 2740.05The home-state court and the Delaware trustee
    6. 2740.06Sham and control arguments
    7. 2740.07Bankruptcy
    8. 2740.08The Court of Chancery as a Forum
  6. ¶ 2750Directed Trusts, Advisers and Governance
    1. 2750.01Delaware's directed trust statute
    2. 2750.02Protector powers
    3. 2750.03The adviser's own liability
    4. 2750.04The settlor as investment adviser
    5. 2750.05The distribution adviser and independence
    6. 2750.06Silent trusts and the designated representative
    7. 2750.07Modification, decanting and settlement
    8. 2750.08Place of administration
  7. ¶ 2760Delaware Entities
    1. 2760.01The Delaware LLC
    2. 2760.02The charging order
    3. 2760.03Limits of the charging order in another state
    4. 2760.04The LLC inside the trust
    5. 2760.05Series LLCs
    6. 2760.06The Delaware statutory trust
  8. ¶ 2770Tax
    1. 2770.01Federal income tax
    2. 2770.02Delaware income tax on trusts
    3. 2770.03The settlor's home-state tax
    4. 2770.04The incomplete gift nongrantor trust
    5. 2770.05Federal transfer taxes
    6. 2770.06Generation-skipping and dynasty planning
  9. ¶ 2780Nonresidents and Migration
    1. 2780.01The nonresident settlor
    2. 2780.02Strengthening the Delaware connection
    3. 2780.03Moving a trust to Delaware
    4. 2780.04Moving a trust out of Delaware
    5. 2780.05Foreign settlors
  10. ¶ 2790Delaware in the Threat Matrix
    1. 2790.01Ratings
    2. 2790.02Timing
    3. 2790.03Delaware and Wyoming compared
    4. 2790.04The Delaware checklist
    5. 2790.05Conclusion

Chapter 28Other Jurisdictions in Brief

  1. ¶ 2801Overview
    1. 2801.01Purpose of the chapter
    2. 2801.02How to use the profiles
    3. 2801.03Three families of offshore statute
    4. 2801.04The American states
    5. 2801.05Common questions for every jurisdiction
  2. ¶ 2810Jersey and Guernsey
    1. 2810.01Jersey: the statute
    2. 2810.02Jersey: the firewall
    3. 2810.03Jersey: reserved powers and validity
    4. 2810.04Jersey: creditors
    5. 2810.05Jersey: sham
    6. 2810.06Jersey: recent amendments
    7. 2810.07Guernsey: the statute
    8. 2810.08Guernsey: reform
    9. 2810.09Guernsey: creditors
    10. 2810.10Assessment
  3. ¶ 2820The Isle of Man and Gibraltar
    1. 2820.01Isle of Man: the statute
    2. 2820.02Isle of Man: creditors
    3. 2820.03Isle of Man: assessment
    4. 2820.04Gibraltar: the statute
    5. 2820.05Gibraltar: how registration works
    6. 2820.06Gibraltar: assessment
  4. ¶ 2830The Cayman Islands and Bermuda
    1. 2830.01Cayman Islands: the statutes
    2. 2830.02Cayman: the firewall
    3. 2830.03Cayman: creditors
    4. 2830.04Cayman: reserved powers and STAR trusts
    5. 2830.05Cayman: assessment
    6. 2830.06Bermuda: the statutes
    7. 2830.07Bermuda: creditors
    8. 2830.08Bermuda: assessment
  5. ¶ 2840The British Virgin Islands, the Bahamas and the Seychelles
    1. 2840.01British Virgin Islands: the statute
    2. 2840.02BVI: the 2021 amendments
    3. 2840.03BVI: VISTA trusts
    4. 2840.04BVI: creditors
    5. 2840.05The Bahamas: the statutes
    6. 2840.06The Bahamas: creditors
    7. 2840.07The Bahamas: assessment
    8. 2840.08The Seychelles: the statute
    9. 2840.09The Seychelles: firewall and creditors
    10. 2840.10The Seychelles: assessment
  6. ¶ 2850Liechtenstein and Singapore
    1. 2850.01Liechtenstein: the foundation
    2. 2850.02Liechtenstein: protection of beneficiaries
    3. 2850.03Liechtenstein: the founder's creditors
    4. 2850.04Liechtenstein: foreign judgments
    5. 2850.05Liechtenstein: assessment
    6. 2850.06Singapore: the statute
    7. 2850.07Singapore: creditors
    8. 2850.08Singapore: assessment
    9. 2850.09Choosing between Singapore and the Channel Islands
  7. ¶ 2860Nevada
    1. 2860.01The statute
    2. 2860.02The limitation period
    3. 2860.03No exception creditors
    4. 2860.04Nevada LLCs
    5. 2860.05Assessment
  8. ¶ 2870South Dakota and Alaska
    1. 2870.01South Dakota: the statute
    2. 2870.02South Dakota: creditors
    3. 2870.03South Dakota: exception creditors
    4. 2870.04South Dakota: assessment
    5. 2870.05Alaska: the statute
    6. 2870.06Alaska: limitation and jurisdiction
    7. 2870.07Alaska in bankruptcy
    8. 2870.08Alaska: assessment
  9. ¶ 2880Other States
    1. 2880.01Ohio
    2. 2880.02Tennessee
    3. 2880.03New Hampshire
    4. 2880.04Utah
    5. 2880.05Other domestic statutes
    6. 2880.06Florida and Texas
  10. ¶ 2890The Jurisdictions Compared
    1. 2890.01The offshore jurisdictions
    2. 2890.02The American states
    3. 2890.03In the Threat Matrix
    4. 2890.04Using this chapter
    5. 2890.05Opinions of local counsel

Chapter 29Choosing, Combining and Migrating Jurisdictions

  1. ¶ 2901Overview
    1. 2901.01From evaluation to decision
    2. 2901.02Why combination is the norm
    3. 2901.03Why migration matters
    4. 2901.04Scope of the chapter
  2. ¶ 2910Selection Criteria
    1. 2910.01Client facts before jurisdiction facts
    2. 2910.02Residence and domicile
    3. 2910.03Location and character of assets
    4. 2910.04The threat profile
    5. 2910.05Tolerance for distance and cost
    6. 2910.06Time horizon and family purposes
    7. 2910.07The trustee before the jurisdiction
    8. 2910.08The non-U.S. client
  3. ¶ 2920Matching the Jurisdiction to the Threat
    1. 2920.01The principle
    2. 2920.02The matching table
    3. 2920.03Secondary threats
    4. 2920.04Timing positions
    5. 2920.05Matching by residence
    6. 2920.06When the dominant threat changes
    7. 2920.07Several dominant threats
  4. ¶ 2930Domestic or Offshore
    1. 2930.01The basic choice
    2. 2930.02Where domestic is enough
    3. 2930.03Where offshore is needed
    4. 2930.04The contempt problem
    5. 2930.05The middle ground
    6. 2930.06Forum risk in the domestic jurisdiction
    7. 2930.07Revisiting the choice
  5. ¶ 2940Hybrid and Bridge Structures
    1. 2940.01Terminology
    2. 2940.02The bridge trust
    3. 2940.03Statutory support
    4. 2940.04The timing problem
    5. 2940.05Design rules for the bridge trust
    6. 2940.06The offshore trust with a domestic LLC
    7. 2940.07The special power of appointment trust
  6. ¶ 2950Combining Jurisdictions in Layers
    1. 2950.01The layered plan
    2. 2950.02First layer: exemptions
    3. 2950.03Second layer: entities
    4. 2950.04Third layer: the trust
    5. 2950.05Fourth layer: custody
    6. 2950.06Consistency among layers
    7. 2950.07Splitting the trust
    8. 2950.08The cost of complexity
  7. ¶ 2960Migrating Trusts
    1. 2960.01Why trusts move
    2. 2960.02Three elements of a move
    3. 2960.03Leaving a domestic jurisdiction
    4. 2960.04Arriving in a protective jurisdiction
    5. 2960.05Moving between domestic jurisdictions
    6. 2960.06Drafting for migration
    7. 2960.07Tax consequences of moving a trust
  8. ¶ 2970Migrating Entities
    1. 2970.01Why entities move
    2. 2970.02Leaving Delaware
    3. 2970.03Wyoming and Nevada
    4. 2970.04Offshore receiving jurisdictions
    5. 2970.05What migration does not change
    6. 2970.06Tax consequences of moving an entity
    7. 2970.07Coordinating entity and trust migrations
  9. ¶ 2980Migration Under Pressure
    1. 2980.01The question
    2. 2980.02The duress clause
    3. 2980.03Good-faith efforts
    4. 2980.04Migration as a transfer
    5. 2980.05The position of the protector and trustee
    6. 2980.06The planner's position
    7. 2980.07What remains permissible
  10. ¶ 2990The Decision Protocol
    1. 2990.01The steps
    2. 2990.02Reassessment
    3. 2990.03Choosing in the Threat Matrix
    4. 2990.04The advice letter
    5. 2990.05Conclusion

Part V: Cross-Border Architecture

Chapter 30Designing the Offshore Trust: Flight, Duress, Protector and Letter of Wishes

  1. ¶ 3001Overview
    1. 3001.01From jurisdiction to instrument
    2. 3001.02The four clauses in the title
    3. 3001.03The three audiences
    4. 3001.04The central tension
    5. 3001.05Organization of the chapter
  2. ¶ 3010Architecture of the Instrument
    1. 3010.01The parties
    2. 3010.02Recitals and purpose
    3. 3010.03Governing law, forum and place of administration
    4. 3010.04Discretionary dispositive provisions
    5. 3010.05The class of beneficiaries and excluded persons
    6. 3010.06Spendthrift and protective provisions
    7. 3010.07The trustee's administrative powers
    8. 3010.08Duration and termination
  3. ¶ 3020Governing Law, Situs and Flight
    1. 3020.01The function of the flight clause
    2. 3020.02The Hague Convention framework
    3. 3020.03The Cook Islands
    4. 3020.04Other offshore statutes
    5. 3020.05Drafting the flight clause
    6. 3020.06The governing-law-follows-trustee clause
    7. 3020.07Limits on flight
  4. ¶ 3030Duress Clauses and Contempt
    1. 3030.01The function of the duress clause
    2. 3030.02Statutory support
    3. 3030.03Lawrence and the void duress amendment
    4. 3030.04The self-created impossibility rule
    5. 3030.05Excluded-person and automatic-removal clauses
    6. 3030.06Drafting the duress clause
  5. ¶ 3040The Protector
    1. 3040.01The office
    2. 3040.02Fiduciary or personal: the statutes
    3. 3040.03Fiduciary or personal: the cases
    4. 3040.04Why the characterization matters for protection
    5. 3040.05The settlor as protector in United States courts
    6. 3040.06Who should be protector
    7. 3040.07Which powers
  6. ¶ 3050The Letter of Wishes
    1. 3050.01Function
    2. 3050.02Statutory treatment
    3. 3050.03Disclosure to beneficiaries
    4. 3050.04Discovery in United States litigation
    5. 3050.05Drafting the letter
    6. 3050.06Revising the letter
  7. ¶ 3060Reserved Powers, Control and Sham
    1. 3060.01What the statutes permit
    2. 3060.02What the statutes do not do
    3. 3060.03Sham
    4. 3060.04Ineffective and "illusory" trusts
    5. 3060.05The three failure modes
    6. 3060.06Design principles
  8. ¶ 3070Trustee Selection and Administration
    1. 3070.01The licensed trustee
    2. 3070.02Independence in practice
    3. 3070.03The regulated participant must know the assets
    4. 3070.04Communications with the settlor
    5. 3070.05Records and accounts
    6. 3070.06The trustee's position when an order is made
    7. 3070.07Co-trustees and United States persons
  9. ¶ 3080Funding and Underlying Companies
    1. 3080.01Funding as part of design
    2. 3080.02The solvency affidavit and statement of assets
    3. 3080.03Which assets to transfer
    4. 3080.04The underlying company
    5. 3080.05The manager problem
    6. 3080.06Tax and reporting at funding
  10. ¶ 3090Drafting Checklist
    1. 3090.01Use of the checklist
    2. 3090.02The instrument
    3. 3090.03Flight and duress
    4. 3090.04The protector
    5. 3090.05The letter of wishes
    6. 3090.06Reserved powers, trustee and funding

Chapter 31Foundations and Hybrid Entities

  1. ¶ 3101Overview
    1. 3101.01The foundation as an alternative to the trust
    2. 3101.02The spread of foundation statutes
    3. 3101.03Hybrid entities
    4. 3101.04Three questions
    5. 3101.05Organization of the chapter
  2. ¶ 3110Liechtenstein
    1. 3110.01The Stiftung
    2. 3110.02The beneficiaries
    3. 3110.03Information rights
    4. 3110.04Reserved rights of the founder
    5. 3110.05Creditors of beneficiaries
    6. 3110.06Creditors of the founder: avoidance of the endowment
    7. 3110.07The Anstalt
    8. 3110.08Assessment
  3. ¶ 3120Panama
    1. 3120.01The private interest foundation
    2. 3120.02Separation of patrimony
    3. 3120.03The three-year fraud limitation
    4. 3120.04Control in the charter
    5. 3120.05Assessment
  4. ¶ 3130Jersey and Guernsey
    1. 3130.01The Jersey foundation
    2. 3130.02Beneficiaries under the Jersey law
    3. 3130.03The Jersey firewall
    4. 3130.04The Guernsey foundation
    5. 3130.05Assessment
  5. ¶ 3140Protective Foundation Statutes
    1. 3140.01Importing the international trust model
    2. 3140.02The Nevis multiform foundation
    3. 3140.03Nevis: creditors of the foundation and of beneficiaries
    4. 3140.04Nevis: creditors of the founder
    5. 3140.05The Cook Islands foundation
    6. 3140.06The Cook Islands fraud provision and forum bar
    7. 3140.07Belize
    8. 3140.08Other statutes
  6. ¶ 3150The Wyoming Statutory Foundation
    1. 3150.01Enactment
    2. 3150.02Founders, boards and protectors
    3. 3150.03Beneficiaries and their creditors
    4. 3150.04Creditors of the founder
    5. 3150.05Continuance and migration
    6. 3150.06Assessment
  7. ¶ 3160United States Tax Classification and Reporting
    1. 3160.01The governing principle
    2. 3160.02The trust test
    3. 3160.03The Anstalt as trust
    4. 3160.04Earlier authority
    5. 3160.05Consequences of classification
  8. ¶ 3170Foundations in Court
    1. 3170.01Juridical personality in United States courts
    2. 3170.02Alter ego and sham claims
    3. 3170.03FBAR and the founder's interest
    4. 3170.04English courts: validity, sham and control
    5. 3170.05Liechtenstein courts
  9. ¶ 3180Hybrid Entities
    1. 3180.01The Cayman foundation company
    2. 3180.02The Cayman STAR trust
    3. 3180.03The British Virgin Islands VISTA trust
    4. 3180.04The Bahamas executive entity
    5. 3180.05The Cook Islands LLC
    6. 3180.06Private trust companies
  10. ¶ 3190Choosing Among Trust, Foundation and Hybrid
    1. 3190.01When a foundation is preferable
    2. 3190.02When a trust is preferable
    3. 3190.03The founder's reserved rights
    4. 3190.04Foundations in the Threat Matrix
    5. 3190.05Checklist

Chapter 32Insurance and Annuity Wrappers

  1. ¶ 3201Overview
    1. 3201.01Insurance as a holding vehicle
    2. 3201.02Three bodies of law
    3. 3201.03Scope
    4. 3201.04A caution on authority
    5. 3201.05Organization of the chapter
  2. ¶ 3210The Wrapper
    1. 3210.01Private placement life insurance
    2. 3210.02Private placement variable annuities
    3. 3210.03The parties
    4. 3210.04Foreign carriers and the § 953(d) election
    5. 3210.05Why a foreign carrier
    6. 3210.06Ownership by a trust
    7. 3210.07Cost and suitability
  3. ¶ 3220Federal Tax Qualification
    1. 3220.01Life insurance under "applicable law."
    2. 3220.02The definitional tests
    3. 3220.03Modified endowment contracts
    4. 3220.04Diversification
    5. 3220.05Annuities held by trusts and entities
    6. 3220.06Consequences of failure
    7. 3220.07The death benefit and transfers for value
  4. ¶ 3230The Investor Control Doctrine
    1. 3230.01The doctrine
    2. 3230.02The 2003 rulings
    3. 3230.03Christoffersen
    4. 3230.04Practice
  5. ¶ 3240Excise Tax, Passive Foreign Investment Companies and Reporting
    1. 3240.01The excise tax on foreign insurers' policies
    2. 3240.02Treaty and election planning
    3. 3240.03Passive foreign investment company issues
    4. 3240.04FBAR
    5. 3240.05Form 8938
    6. 3240.06FATCA and the CRS
    7. 3240.07Reporting by the owning trust
  6. ¶ 3250Creditor Protection Under the Law of the Carrier's Jurisdiction
    1. 3250.01Two kinds of protection
    2. 3250.02Liechtenstein
    3. 3250.03Switzerland
    4. 3250.04Luxembourg
    5. 3250.05Bermuda
    6. 3250.06The Isle of Man
    7. 3250.07Which law applies?
    8. 3250.08Drafting the beneficiary designation
  7. ¶ 3260State Exemption Statutes and Foreign Policies
    1. 3260.01The question
    2. 3260.02Florida
    3. 3260.03Florida's conversion statute
    4. 3260.04Texas
    5. 3260.05New York
    6. 3260.06Unauthorized insurers
    7. 3260.07Domicile and choice of law
  8. ¶ 3270Premium Payments as Fraudulent Transfers
    1. 3270.01The premium as the transfer
    2. 3270.02Bossart
    3. 3270.03Exemption planning and denial of discharge
    4. 3270.04Private annuities
    5. 3270.05Timing and solvency
    6. 3270.06The insurer's position
  9. ¶ 3280The Wrapper Within a Protective Structure
    1. 3280.01The wrapper as an asset of the trust
    2. 3280.02Policyholder rights as powers
    3. 3280.03Investor control and creditor control
    4. 3280.04The insured and the beneficiary
    5. 3280.05Bank and custodian
    6. 3280.06Absence of decided cases
  10. ¶ 3290Wrappers in the Threat Matrix
    1. 3290.01Against private creditors
    2. 3290.02Against family claimants
    3. 3290.03Against the government
    4. 3290.04Against the bankruptcy trustee
    5. 3290.05Checklist

Chapter 33Layered Structures: Entity, Trust and Jurisdiction Combined

  1. ¶ 3301Overview
    1. 3301.01Why plans are layered
    2. 3301.02The creditor's perspective
    3. 3301.03The planner's perspective
    4. 3301.04Organization of the chapter
  2. ¶ 3310Anatomy of a Layered Structure
    1. 3310.01The basic stack
    2. 3310.02The function of each layer
    3. 3310.03Inside and outside liability
    4. 3310.04Common variants
    5. 3310.05What layering does not do
    6. 3310.06Choosing the law for each layer
  3. ¶ 3320Reverse Veil Piercing
    1. 3320.01The doctrine
    2. 3320.02Why the doctrine matters to a stack
    3. 3320.03Jurisdictions recognizing outsider reverse piercing
    4. 3320.04Delaware
    5. 3320.05California and the LLC
    6. 3320.06Jurisdictions rejecting or limiting the doctrine
    7. 3320.07The Wyoming statute
    8. 3320.08The factors that decide reverse piercing cases
  4. ¶ 3330Alter Ego and Nominee Theories
    1. 3330.01Nominee and alter ego distinguished from piercing
    2. 3330.02The federal tax cases
    3. 3330.03Control as the decisive fact
    4. 3330.04Trusts as alter egos
    5. 3330.05The English approach to companies
  5. ¶ 3340Single-Member LLCs in a Stack
    1. 3340.01The single-member problem
    2. 3340.02Olmstead and the Florida response
    3. 3340.03Statutes that protect single-member LLCs
    4. 3340.04Bankruptcy of the sole member
    5. 3340.05Modanlo and the collapse of a two-level stack
    6. 3340.06The trust as sole member
  6. ¶ 3350Control-Based Reach: Freezing Orders, Discovery and Turnover
    1. 3350.01Control as a basis for remedies
    2. 3350.02English freezing orders and controlled assets
    3. 3350.03Wholly owned companies
    4. 3350.04Liability of those who assist
    5. 3350.05Discovery of documents held within the stack
    6. 3350.06Turnover of property outside the state
    7. 3350.07Orders directed to the client personally
  7. ¶ 3360Bankruptcy
    1. 3360.01The estate and the stack
    2. 3360.02Avoidance of transfers to self-settled trusts
    3. 3360.03Substantive consolidation
    4. 3360.04Consolidation of non-debtor entities
    5. 3360.05Governing-law clauses in bankruptcy
  8. ¶ 3370Collapsing Transactions and Receiverships
    1. 3370.01Collapsing a series of transfers
    2. 3370.02Application to stacks
    3. 3370.03Receiverships over entities in a chain
    4. 3370.04Relief defendants
    5. 3370.05Limits of collapsing
  9. ¶ 3380Tax Classification and Reporting
    1. 3380.01Classification of each layer
    2. 3380.02The disregarded entity under a grantor trust
    3. 3380.03Reporting
    4. 3380.04Reporting as evidence
  10. ¶ 3390Designing the Stack
    1. 3390.01Principles
    2. 3390.02The layered structure in the Threat Matrix
    3. 3390.03Common failures
    4. 3390.04Checklist

Chapter 34Banking: Where the Assets Are Held

  1. ¶ 3401Overview
    1. 3401.01Where the assets are
    2. 3401.02Two risks
    3. 3401.03Organization of the chapter
  2. ¶ 3410Bank Selection and the Situs of Deposits
    1. 3410.01The jurisdiction of deposit and the jurisdiction of the trust
    2. 3410.02The separate entity rule
    3. 3410.03Turnover and personal jurisdiction
    4. 3410.04Property of a person within the jurisdiction
    5. 3410.05Funds in transit
    6. 3410.06The English counterpart
    7. 3410.07Selection criteria
  3. ¶ 3420Trustee Control and Signing Mandates
    1. 3420.01Who signs
    2. 3420.02The control cases
    3. 3420.03Self-created inability
    4. 3420.04Investment authority
    5. 3420.05Bankruptcy and the automatic stay
    6. 3420.06Online access, statements and communications
    7. 3420.07The trustee's own controls
  4. ¶ 3430United States Reach Over Foreign Banks
    1. 3430.01Section 5318(k) subpoenas
    2. 3430.02Enforcement
    3. 3430.03Personal jurisdiction over foreign banks
    4. 3430.04Post-judgment discovery of foreign assets
    5. 3430.05Prejudgment freezes
  5. ¶ 3440Due Diligence and De-Risking
    1. 3440.01The bank as gatekeeper
    2. 3440.02United States customer due diligence
    3. 3440.03Swiss due diligence and Form T
    4. 3440.04International standards
    5. 3440.05Source of wealth and the protective purpose
    6. 3440.06Account closure
  6. ¶ 3450Deposits, Custody Assets and Bank Insolvency
    1. 3450.01The distinction
    2. 3450.02United States deposit insurance
    3. 3450.03Swiss deposit protection and custody assets
    4. 3450.04United States custody under Article 8
    5. 3450.05European deposit protection and bail-in
    6. 3450.06The Credit Suisse write-down
    7. 3450.07Practice
    8. 3450.08The custody agreement
    9. 3450.09Sub-custody chains
  7. ¶ 3460Freezing Orders Served on Banks
    1. 3460.01The English freezing order
    2. 3460.02The bank's position
    3. 3460.03Territorial limits: the Babanaft and Baltic provisos
    4. 3460.04United States restraints
    5. 3460.05The trust's assets and the settlor's assets
    6. 3460.06The trustee's response to a freeze
  8. ¶ 3470Digital Assets and Custodians
    1. 3470.01Custody and ownership
    2. 3470.02Accounting and regulation
    3. 3470.03Custody under the GENIUS Act
    4. 3470.04Investment adviser custody
    5. 3470.05Controllable electronic records under UCC Article 12
    6. 3470.06Wyoming
    7. 3470.07Self-custody and protective structures
    8. 3470.08Exchanges distinguished from custodians
  9. ¶ 3480Designing the Banking Arrangement
    1. 3480.01Principles
    2. 3480.02Diversification of custodians
    3. 3480.03The bank's own policies
    4. 3480.04Records
  10. ¶ 3490Banking in the Threat Matrix
    1. 3490.01Against private creditors
    2. 3490.02Against family claimants
    3. 3490.03Against the government
    4. 3490.04Against the bankruptcy trustee
    5. 3490.05Checklist

Chapter 35Conflict of Laws: The Hague Conventions, Restatement § 270, UVTA § 10 and Comity

  1. ¶ 3501Overview
    1. 3501.01The question behind every protective structure
    2. 3501.02Four questions
    3. 3501.03The settlor's home jurisdiction and the haven
    4. 3501.04The instruments
    5. 3501.05Organization of the chapter
  2. ¶ 3510Method: Characterization, Issues and the Choice of Conflict Rules
    1. 3510.01Characterization
    2. 3510.02The funding transfer as a separate issue
    3. 3510.03Issue-by-issue analysis
    4. 3510.04Which conflict rules: state courts
    5. 3510.05Which conflict rules: federal diversity courts
    6. 3510.06Which conflict rules: bankruptcy courts
    7. 3510.07The federal rule in practice
    8. 3510.08Substance, procedure and remedies
    9. 3510.09Renvoi
  3. ¶ 3520The Hague Trusts Convention
    1. 3520.01Origin and purpose
    2. 3520.02Scope
    3. 3520.03The choice of law rules
    4. 3520.04Recognition and its limits
    5. 3520.05Article 15: the mandatory rules of the forum's chosen law
    6. 3520.06Articles 13, 16 and 18
    7. 3520.07The Contracting Parties
    8. 3520.08United Kingdom implementation
    9. 3520.09The Convention in the havens
  4. ¶ 3530The Restatement Rules for Trusts
    1. 3530.01Section 270
    2. 3530.02Substantial relation
    3. 3530.03The strong public policy proviso
    4. 3530.04Restraints on alienation
    5. 3530.05The Uniform Trust Code
    6. 3530.06The Restatement (Third)
    7. 3530.07Brooks
    8. 3530.08Lawrence
    9. 3530.09The pattern of the cases
  5. ¶ 3540Choice of Law for Voidable Transfer Claims
    1. 3540.01The position before 2014
    2. 3540.02The text of section 10
    3. 3540.03The debtor's location
    4. 3540.04The trust's governing law does not control
    5. 3540.05Asset tourism
    6. 3540.06Scope of the rule
    7. 3540.07Foreign debtors
    8. 3540.08Enactments
    9. 3540.09The protective states
    10. 3540.10The protective statutes' own rules
    11. 3540.11Bankruptcy
  6. ¶ 3550Public Policy and Mandatory Rules
    1. 3550.01Two doctrines
    2. 3550.02The American formulations
    3. 3550.03What counts as a strong policy
    4. 3550.04The Bankruptcy Code as mandatory law
    5. 3550.05Criminal law
    6. 3550.06The Hague Trusts Convention
    7. 3550.07Public policy in the havens
    8. 3550.08No public policy exception for judgments
    9. 3550.09Matrimonial claims
  7. ¶ 3560Recognition and Enforcement of Judgments
    1. 3560.01Three settings
    2. 3560.02Sister-state judgments
    3. 3560.03Exclusive-forum provisions
    4. 3560.04Foreign-country judgments in American courts
    5. 3560.05American judgments in common law havens
    6. 3560.06The offshore non-recognition statutes
    7. 3560.07The Hague judgments conventions
    8. 3560.08The practical consequence
  8. ¶ 3570Comity
    1. 3570.01The doctrine
    2. 3570.02Reciprocity
    3. 3570.03Comity and orders against persons
    4. 3570.04Comity in bankruptcy
    5. 3570.05Comity in the havens
    6. 3570.06Comity as a reason for restraint in American courts
  9. ¶ 3580Drafting and Planning
    1. 3580.01The governing law clause
    2. 3580.02Substantial relation
    3. 3580.03The place of administration
    4. 3580.04Forum clauses
    5. 3580.05Change of governing law
    6. 3580.06The settlor's residence
    7. 3580.07Entities beneath the trust
    8. 3580.08Documenting the funding transfer
    9. 3580.09Points of contact with the home jurisdiction
    10. 3580.10Checklist
  10. ¶ 3590Conflict of Laws in the Threat Matrix
    1. 3590.01Against private creditors
    2. 3590.02Against family claimants
    3. 3590.03Against the government
    4. 3590.04Against the bankruptcy trustee
    5. 3590.05Timing

Part VI: Defense

Chapter 36When the Claim Arrives: The First Thirty Days

  1. ¶ 3601Overview
    1. 3601.01Scope of the chapter
    2. 3601.02Why the first thirty days matter
    3. 3601.03The persons involved
    4. 3601.04How to read the chapter
  2. ¶ 3610Triage
    1. 3610.01Five questions before any action
    2. 3610.02Identifying the claim and the claimant
    3. 3610.03The timing position
    4. 3610.04The forum and its reach
    5. 3610.05The size of the claim against the balance sheet
    6. 3610.06Insurance
    7. 3610.07The existing plan
    8. 3610.08The intake record
  3. ¶ 3620How the Claim Changes the Legal Position
    1. 3620.01Present creditor status
    2. 3620.02Actual intent and the badges
    3. 3620.03Constructive fraud and insider payments
    4. 3620.04The duty to preserve evidence
    5. 3620.05Preservation in practice for an individual client
    6. 3620.06Criminal lines
    7. 3620.07Bankruptcy consequences of conduct in the window
    8. 3620.08Counsel's duties in the window
    9. 3620.09Separating defense from planning
  4. ¶ 3630Insurance in the Window
    1. 3630.01Why insurance comes first
    2. 3630.02Notice and the consequences of delay
    3. 3630.03The duty to defend
    4. 3630.04Reservation of rights and independent counsel
    5. 3630.05Settlement within limits and the excess exposure
    6. 3630.06Cooperation and consent
  5. ¶ 3640Reviewing the Existing Plan
    1. 3640.01Purpose of the review
    2. 3640.02Inventory
    3. 3640.03Retained powers and control in fact
    4. 3640.04Solvency at each funding
    5. 3640.05Formalities
    6. 3640.06Defects found in the review
    7. 3640.07Disclosure obligations
    8. 3640.08Reporting to the client
  6. ¶ 3650What the Creditor Can Do Before Judgment
    1. 3650.01The creditor's early remedies
    2. 3650.02Attachment and state-law remedies
    3. 3650.03Injunctions restraining assets
    4. 3650.04Statutory enforcement actions
    5. 3650.05Temporary restraining orders
    6. 3650.06Notice of pendency against real property
    7. 3650.07Involuntary bankruptcy
    8. 3650.08Discovery, bank subpoenas and foreign proceedings
  7. ¶ 3660The Offshore Trust in the Window
    1. 3660.01The trustee's position
    2. 3660.02Limitation periods under haven law
    3. 3660.03Repatriation orders and the duress clause
    4. 3660.04Self-created impossibility
    5. 3660.05Distributions after an order
    6. 3660.06What the settlor should do
    7. 3660.07What the trustee should do
    8. 3660.08Domestic trusts in the window
  8. ¶ 3670What the Client May Still Do
    1. 3670.01The governing principle
    2. 3670.02Paying for the defense
    3. 3670.03Defense funding in criminal and forfeiture cases
    4. 3670.04Paying other creditors
    5. 3670.05Converting non-exempt assets to exempt assets
    6. 3670.06Statutory limits on conversion
    7. 3670.07Ordinary transactions for value
    8. 3670.08What should not be done
  9. ¶ 3680Strategy and Settlement
    1. 3680.01The early assessment
    2. 3680.02Collectability and settlement value
    3. 3680.03Financial disclosure in settlement
    4. 3680.04Settlement discussions and Rule 408
    5. 3680.05Litigating the claim and litigating the structure
    6. 3680.06The bankruptcy option
  10. ¶ 3690The Thirty-Day Protocol and the Threat Matrix
    1. 3690.01The protocol
    2. 3690.02The window in the Threat Matrix
    3. 3690.03Conduct in the window and the rating
    4. 3690.04Cross-references

Chapter 37Discovery, Privilege and the Crime-Fraud Exception

  1. ¶ 3701Overview
    1. 3701.01Scope of the chapter
    2. 3701.02Why discovery decides most cases
    3. 3701.03Persons from whom discovery is sought
    4. 3701.04How to read the chapter
  2. ¶ 3710The Reach of Discovery into Assets and Structures
    1. 3710.01Sources of information
    2. 3710.02Discovery before judgment
    3. 3710.03Discovery after judgment
    4. 3710.04Control over documents held by others
    5. 3710.05Subpoenas to third parties
    6. 3710.06Privilege logs
    7. 3710.07The trust instrument and the transfer records
  3. ¶ 3720Privilege and Work Product in Planning
    1. 3720.01What the privilege protects
    2. 3720.02Communications and facts
    3. 3720.03Work product
    4. 3720.04Accountants and other planners
    5. 3720.05Trustees and the fiduciary exception
    6. 3720.06Waiver by putting advice in issue
    7. 3720.07Waiver by disclosure to third parties
    8. 3720.08Whose privilege, and which law
  4. ¶ 3730The Crime-Fraud Exception
    1. 3730.01The rule
    2. 3730.02In camera review
    3. 3730.03Fraudulent conveyance as fraud
    4. 3730.04Application by other courts
    5. 3730.05Actual and constructive fraud
    6. 3730.06State formulations
    7. 3730.07Temporal scope
    8. 3730.08The lawyer's position
  5. ¶ 3740The Fifth Amendment
    1. 3740.01When the privilege is available
    2. 3740.02The adverse inference
    3. 3740.03The act of production
    4. 3740.04Required records of foreign accounts
    5. 3740.05The privilege and the impossibility defense
    6. 3740.06Coordinating civil and criminal advice
  6. ¶ 3750The Planner as Witness
    1. 3750.01Why the planner is a witness
    2. 3750.02The advocate-witness rule
    3. 3750.03Depositions of counsel
    4. 3750.04Conflicts between planner and client
    5. 3750.05The engagement letter
  7. ¶ 3760Discovery Abroad
    1. 3760.01Two routes to foreign evidence
    2. 3760.02The Convention is optional
    3. 3760.03The Convention's procedures
    4. 3760.04Foreign secrecy laws and sanctions
    5. 3760.05Secrecy and blocking provisions
    6. 3760.06Section 1782 and discovery in aid of foreign proceedings
    7. 3760.07The settlor's position
  8. ¶ 3780The Planning File
    1. 3780.01Purpose of the file
    2. 3780.02Contents
    3. 3780.03Advice and facts
    4. 3780.04What the file should not contain
    5. 3780.05Retention
  9. ¶ 3790Discovery in the Threat Matrix
    1. 3790.01Exposure of information by timing
    2. 3790.02Reading the table
    3. 3790.03Cross-references

Chapter 38Freezing Orders, Norwich Pharmacal and International Asset Tracing

  1. ¶ 3801Overview
    1. 3801.01Scope of the chapter
    2. 3801.02Why the chapter matters to planning
    3. 3801.03The divergence between England and the United States
    4. 3801.04Relation to other chapters
    5. 3801.05Terminology
  2. ¶ 3810The English Freezing Injunction
    1. 3810.01Origin
    2. 3810.02Statutory and rule basis
    3. 3810.03The model order
    4. 3810.04The test: a good arguable case
    5. 3810.05The test: a real risk of dissipation
    6. 3810.06Full and frank disclosure
    7. 3810.07The cross-undertaking in damages
    8. 3810.08Ancillary disclosure and cross-examination
    9. 3810.09Search and imaging orders
    10. 3810.10Breach
  3. ¶ 3820Worldwide Orders, Third Parties and Trust Assets
    1. 3820.01Development of the worldwide order
    2. 3820.02The standard for a worldwide order
    3. 3820.03Persons outside England and Wales: the Babanaft and Baltic provisos
    4. 3820.04Consequences for offshore trustees and managers
    5. 3820.05Permission to enforce abroad: the Dadourian guidelines
    6. 3820.06The Chabra jurisdiction over non-parties
    7. 3820.07Interests under discretionary trusts
    8. 3820.08Loan facilities and the extended definition of assets
  4. ¶ 3830Relief in Aid of Foreign Proceedings and the Offshore Courts
    1. 3830.01Section 25 of the Civil Jurisdiction and Judgments Act 1982
    2. 3830.02Cuoghi and the considerations
    3. 3830.03Freestanding freezing relief: Broad Idea
    4. 3830.04The limits of Broad Idea
    5. 3830.05The British Virgin Islands
    6. 3830.06The Cayman Islands
    7. 3830.07The asset protection jurisdictions
  5. ¶ 3840Norwich Pharmacal and Bankers Trust Orders
    1. 3840.01The Norwich Pharmacal principle
    2. 3840.02The conditions
    3. 3840.03The proportionality factors
    4. 3840.04Application to asset tracing
    5. 3840.05Bankers Trust orders
    6. 3840.06Bankers' books
    7. 3840.07Respondents abroad
    8. 3840.08Offshore practice
    9. 3840.09Digital assets
  6. ¶ 3850The United States: Grupo Mexicano and Its Exceptions
    1. 3850.01The rule
    2. 3850.02The reasoning
    3. 3850.03The dissent
    4. 3850.04Exception: equitable claims
    5. 3850.05Exception: fraudulent-transfer claims
    6. 3850.06The statutory remedy under the UVTA
    7. 3850.07Exception: state prejudgment remedies under Rule 64
    8. 3850.08State courts and the Mareva remedy
    9. 3850.09After judgment: restraining notices and turnover
    10. 3850.10Nonparties and personal jurisdiction
    11. 3850.11Government plaintiffs
  7. ¶ 3860Civil-Law Measures and Cross-Border Recognition
    1. 3860.01The Swiss attachment
    2. 3860.02Recognition of English freezing orders in Switzerland
    3. 3860.03The United Kingdom after its departure from the European Union
    4. 3860.04Provisional measures within the European Union
    5. 3860.05The European Account Preservation Order
    6. 3860.06Enforcement of freezing orders in the United States
  8. ¶ 3870Tracing Assets Across Borders
    1. 3870.01The tracing exercise
    2. 3870.02The debtor's own disclosure
    3. 3870.03Public registers
    4. 3870.04Bank and financial records
    5. 3870.05Investigators and lawful methods
    6. 3870.06Digital assets and blockchain analysis
    7. 3870.07Discovery in aid of foreign proceedings
    8. 3870.08The tracing picture from the debtor's side
  9. ¶ 3880Structures Under a Freezing Order
    1. 3880.01The trustee served with a foreign order
    2. 3880.02Duress and flight provisions
    3. 3880.03Entities controlled by the respondent
    4. 3880.04Living expenses and legal costs
    5. 3880.05Variation and discharge
    6. 3880.06Disclosure obligations and confidentiality
    7. 3880.07Cross-undertakings and third parties
    8. 3880.08Design implications
  10. ¶ 3890Freezing Orders in the Threat Matrix
    1. 3890.01Interim relief by creditor class
    2. 3890.02Interim relief by timing
    3. 3890.03Interim relief by forum
    4. 3890.04Checklist
    5. 3890.05Cross-references

Chapter 39Contempt, Repatriation Orders and the Impossibility Defense

  1. ¶ 3901Overview
    1. 3901.01Scope of the chapter
    2. 3901.02Why contempt is the critical risk
    3. 3901.03The settled position
    4. 3901.04Relation to other chapters
  2. ¶ 3910Civil and Criminal Contempt
    1. 3910.01The statutory power
    2. 3910.02The distinction
    3. 3910.03Imprisonment and fines
    4. 3910.04The paradigm case is a turnover order
    5. 3910.05Procedure in civil contempt
    6. 3910.06Procedure in criminal contempt
    7. 3910.07Procedural protections where liberty is at stake
  3. ¶ 3920Repatriation and Turnover Orders
    1. 3920.01The in personam power
    2. 3920.02Sources of authority
    3. 3920.03Forms of order
    4. 3920.04Repatriation and the automatic stay
    5. 3920.05Directions signed by another
  4. ¶ 3930The Impossibility Defense
    1. 3930.01Inability as a defense
    2. 3930.02The burden of production
    3. 3930.03The Fifth Amendment does not carry the burden
    4. 3930.04The standard in asset protection cases
    5. 3930.05Self-created impossibility
    6. 3930.06The Ninth Circuit's reservation
    7. 3930.07When the trust predates the claim
  5. ¶ 3940The Asset Protection Cases
    1. 3940.01Affordable Media
    2. 3940.02Lawrence
    3. 3940.03Bilzerian
    4. 3940.04Solow
    5. 3940.05Coker
    6. 3940.06Grant
    7. 3940.07Chadwick
    8. 3940.08Eulich and document control
  6. ¶ 3950Duration of Coercive Confinement
    1. 3950.01The governing principle
    2. 3950.02The Second Circuit standard
    3. 3950.03No fixed limit outside the witness statute
    4. 3950.04Chadwick and the federal habeas standard
    5. 3950.05Release does not end the obligation
  7. ¶ 3960Contempt in England and the Offshore Courts
    1. 3960.01The English rules
    2. 3960.02The criminal standard
    3. 3960.03Fixed terms and the two-year maximum
    4. 3960.04Sentencing for breach of freezing orders
    5. 3960.05Purging and early release
    6. 3960.06Impossibility in English law
    7. 3960.07Barclay and trust-held wealth
    8. 3960.08The offshore courts and extradition
    9. 3960.09Statutory duress provisions
  8. ¶ 3970Planning for the Contempt Risk
    1. 3970.01The question the court asks
    2. 3970.02Funding at T0
    3. 3970.03Powers retained by the settlor
    4. 3970.04Duress clauses
    5. 3970.05Conduct after a claim
    6. 3970.06Assets kept at home
    7. 3970.07The planner's exposure
  9. ¶ 3990Contempt in the Threat Matrix
    1. 3990.01Contempt exposure by creditor class
    2. 3990.02Contempt exposure by timing and design
    3. 3990.03Exposure by forum
    4. 3990.04Checklist
    5. 3990.05Cross-references

Chapter 40The Trustee Under Pressure

  1. ¶ 4001Overview
    1. 4001.01Scope of the chapter
    2. 4001.02Why the trustee's conduct decides cases
    3. 4001.03The governing principle
    4. 4001.04Relation to other chapters
  2. ¶ 4010The Trustee's Duties When the Settlor Is Pursued
    1. 4010.01Sources of pressure
    2. 4010.02The duty to the beneficiaries as a class
    3. 4010.03Neutrality in disputes about the trust
    4. 4010.04No duty to obey a foreign order as such
    5. 4010.05Requests from the settlor under pressure
    6. 4010.06Regulatory duties
  3. ¶ 4020Jurisdiction over the Trustee
    1. 4020.01Personal jurisdiction in the United States
    2. 4020.02Contacts that may expose the trustee
    3. 4020.03Necessary parties
    4. 4020.04Submission
    5. 4020.05The Jersey approach to submission
    6. 4020.06Trust assets held in the United States
  4. ¶ 4030Directions and Blessing Applications
    1. 4030.01The four categories
    2. 4030.02The test for a blessing
    3. 4030.03Statutory sources
    4. 4030.04Directions where a foreign order affects the trust
    5. 4030.05Protection from acting on directions
    6. 4030.06Directions in trustee replacement
  5. ¶ 4040Trustee Liability
    1. 4040.01Heads of exposure
    2. 4040.02The trustee as transferee in bankruptcy
    3. 4040.03Who is the initial transferee
    4. 4040.04The trustee as transferee under the UVTA
    5. 4040.05Accessory liability
    6. 4040.06Knowing receipt
    7. 4040.07Claims against the trustee in the trust's jurisdiction
    8. 4040.08Contempt exposure
  6. ¶ 4050Firewall and Protective Statutes
    1. 4050.01Function
    2. 4050.02Jersey
    3. 4050.03Cayman Islands and Bahamas
    4. 4050.04Bermuda
    5. 4050.05Belize
    6. 4050.06Nevis
    7. 4050.07Cook Islands
    8. 4050.08Comparison
  7. ¶ 4060Protectors Under Pressure
    1. 4060.01The protector's exposure
    2. 4060.02Fiduciary or personal powers
    3. 4060.03Personal powers and ownership
    4. 4060.04Statutory defaults
    5. 4060.05Removal of a protector
    6. 4060.06Statutory duress and the protector
  8. ¶ 4070Costs, Indemnity and Disclosure
    1. 4070.01The indemnity
    2. 4070.02Beddoe applications
    3. 4070.03Security on retirement or distribution
    4. 4070.04Security from the creditor
    5. 4070.05Disclosure to beneficiaries
    6. 4070.06Confidentiality statutes
    7. 4070.07Disclosure to the foreign court
  9. ¶ 4080Practice Protocol
    1. 4080.01The protocol
    2. 4080.02Acceptance and the planning file
    3. 4080.03Communications with the settlor
    4. 4080.04Retirement
  10. ¶ 4090The Trustee in the Threat Matrix
    1. 4090.01Pressure by creditor class
    2. 4090.02Trustee exposure by design and conduct
    3. 4090.03Checklist for the trust designer
    4. 4090.04Cross-references

Chapter 41Recognition and Enforcement Abroad

  1. ¶ 4101Overview
    1. 4101.01Scope of the chapter
    2. 4101.02Why recognition matters to planning
    3. 4101.03The central conclusions
    4. 4101.04Relation to other chapters
  2. ¶ 4110United States Judgments in Common-Law Courts
    1. 4110.01The doctrine of obligation
    2. 4110.02Jurisdiction in the international sense
    3. 4110.03Submission
    4. 4110.04Enforcement of a New York judgment in England
    5. 4110.05Finality and money
    6. 4110.06Procedure and execution
  3. ¶ 4120Defenses: Fraud, Penalty, Revenue and Public Policy
    1. 4120.01Fraud
    2. 4120.02The standard of fraud
    3. 4120.03Penal laws
    4. 4120.04Revenue laws
    5. 4120.05Multiple damages
    6. 4120.06Natural justice and public policy
    7. 4120.07Punitive damages and large awards
  4. ¶ 4130Statutory and Treaty Regimes
    1. 4130.01The United Kingdom
    2. 4130.02The offshore registration statutes
    3. 4130.03Switzerland
    4. 4130.04The Hague Conventions
    5. 4130.05Liechtenstein
  5. ¶ 4140The Asset Protection Jurisdictions
    1. 4140.01Two layers of protection
    2. 4140.02The Cook Islands
    3. 4140.03Nevis
    4. 4140.04Belize
    5. 4140.05Jersey, Guernsey, Cayman, Bermuda and the Bahamas
    6. 4140.06Judgments against the settlor and the trust distinguished
  6. ¶ 4150Arbitral Awards
    1. 4150.01The New York Convention
    2. 4150.02The trust jurisdictions
    3. 4150.03Awards and the firewall statutes
    4. 4150.04Enforcement in the United States
  7. ¶ 4160Cross-Border Insolvency
    1. 4160.01The framework
    2. 4160.02Common-law assistance and its limits
    3. 4160.03Singularis
    4. 4160.04Consequences for trusts
    5. 4160.05Chapter 15
    6. 4160.06COMI
    7. 4160.07Foreign avoidance law in chapter 15
    8. 4160.08Switzerland
    9. 4160.09Individuals
  8. ¶ 4170Foreign Judgments in the United States
    1. 4170.01The Uniform Act
    2. 4170.02Foreign judgments upholding trusts
    3. 4170.03The revenue rule in the United States
    4. 4170.04Defamation judgments
    5. 4170.05Sister-state judgments and domestic asset protection trusts
  9. ¶ 4190Recognition in the Threat Matrix
    1. 4190.01Recognition by creditor class
    2. 4190.02Recognition by jurisdiction
    3. 4190.03The protective rating
    4. 4190.04Checklist
    5. 4190.05Cross-references

Part VII: Tax, Transparency and Compliance

Chapter 42Tax Neutrality: Grantor-Trust Rules, Gift Completeness, ING Trusts and § 2036

  1. ¶ 4201Overview
    1. 4201.01Scope of the chapter
    2. 4201.02The principle of tax neutrality
    3. 4201.03The four questions
    4. 4201.04Relation to other chapters
  2. ¶ 4210The Grantor-Trust Rules
    1. 4210.01The operative rule
    2. 4210.02Adverse and nonadverse parties
    3. 4210.03Self-settled protective trusts are grantor trusts
    4. 4210.04The substitution power
    5. 4210.05Tax reimbursement clauses
    6. 4210.06Grantor-trust status for foreign grantors
    7. 4210.07Beneficiaries treated as owners
  3. ¶ 4220Gift Completeness
    1. 4220.01The regulation
    2. 4220.02The regulation's example
    3. 4220.03Creditor access makes the gift incomplete
    4. 4220.04Completed gifts to domestic asset protection trusts
    5. 4220.05Testamentary powers of appointment
    6. 4220.06Reporting the gift
  4. ¶ 4230ING Trusts
    1. 4230.01The design
    2. 4230.02The private letter rulings
    3. 4230.03The no-ruling policy
    4. 4230.04State responses
    5. 4230.05ING trusts and asset protection
  5. ¶ 4240Estate Inclusion and § 2036
    1. 4240.01The statutes
    2. 4240.02Discretionary distributions alone
    3. 4240.03Creditor access and inclusion
    4. 4240.04Consequences for protective trusts
    5. 4240.05Exception creditors and inclusion
    6. 4240.06Protectors and section 2038
  6. ¶ 4250Foreign Trusts
    1. 4250.01Domestic or foreign
    2. 4250.02Flight clauses and the classification of domestic trusts
    3. 4250.03Section 679 and section 684
    4. 4250.04Throwback and the interest charge
    5. 4250.05Loans from foreign trusts
    6. 4250.06The settlor's death
  7. ¶ 4260Entities and Foreign Corporations
    1. 4260.01Classification
    2. 4260.02Controlled foreign corporations
    3. 4260.03Passive foreign investment companies
    4. 4260.04Domestic entities beneath protective trusts
  8. ¶ 4270Insurance Wrappers and State Income Tax
    1. 4270.01Life insurance and annuities
    2. 4270.02Investor control
    3. 4270.03State income taxation of trusts
    4. 4270.04State tax and protective trusts
    5. 4270.05Insurance exemptions and tax qualification
  9. ¶ 4280Tax-Neutral Design
    1. 4280.01The design sequence
    2. 4280.02Offshore trusts
    3. 4280.03Domestic asset protection trusts
    4. 4280.04Entities and investments
    5. 4280.05Documentation
  10. ¶ 4290Tax in the Threat Matrix
    1. 4290.01The government as creditor
    2. 4290.02Tax design and the protective rating
    3. 4290.03Checklist
    4. 4290.04Cross-references

Chapter 43U.S. Information Reporting

  1. ¶ 4301Overview
    1. 4301.01Scope of the chapter
    2. 4301.02Why reporting is central
    3. 4301.03The returns in outline
    4. 4301.04Relation to other chapters
    5. 4301.05Development of the regime
  2. ¶ 4310Foreign Trust Reporting: Forms 3520 and 3520-A
    1. 4310.01Reportable events
    2. 4310.02The United States owner
    3. 4310.03The United States agent
    4. 4310.04Beneficiaries
    5. 4310.05Due dates
    6. 4310.06Penalties
    7. 4310.07Assessability
    8. 4310.08Annual statements
    9. 4310.09Domestic trusts treated as foreign
  3. ¶ 4320FBAR
    1. 4320.01The obligation
    2. 4320.02Financial interest through trusts and entities
    3. 4320.03Signature authority and protectors
    4. 4320.04Due date
    5. 4320.05Penalties
    6. 4320.06Bittner
    7. 4320.07Willfulness
    8. 4320.08Records and the Fifth Amendment
    9. 4320.09Accounts that must be reported
    10. 4320.10Advisers with signature authority
  4. ¶ 4330Form 8938
    1. 4330.01The obligation
    2. 4330.02Trust interests
    3. 4330.03Avoiding duplication
    4. 4330.04Domestic trusts and entities
    5. 4330.05Penalties
    6. 4330.06FBAR and Form 8938 compared
  5. ¶ 4340Foreign Entities: Forms 5471, 8865, 8858 and 926
    1. 4340.01Form 5471
    2. 4340.02Form 8865
    3. 4340.03Form 926
    4. 4340.04Form 8858
    5. 4340.05The structures most commonly affected
    6. 4340.06Form 5472 and foreign owners of United States entities
    7. 4340.07Foreign corporations after the settlor's death
  6. ¶ 4350PFICs
    1. 4350.01The annual report
    2. 4350.02No monetary penalty, an open limitations period
    3. 4350.03PFICs in protective structures
    4. 4350.04Elections and their timing
  7. ¶ 4360Penalties, Limitations and Reasonable Cause
    1. 4360.01The penalty structure
    2. 4360.02Penalties summarized
    3. 4360.03The extended period of limitations
    4. 4360.04Reasonable cause
    5. 4360.05Reasonable cause and offshore trustees
    6. 4360.06Criminal exposure
    7. 4360.07First-time abatement
    8. 4360.08Contesting a penalty
    9. 4360.09Valuation and currency
  8. ¶ 4370Remediation
    1. 4370.01The choices
    2. 4370.02Streamlined procedures
    3. 4370.03Delinquent information returns
    4. 4370.04Voluntary disclosure
    5. 4370.05Quiet disclosure
    6. 4370.06Remediation and asset protection
    7. 4370.07Choosing a route
  9. ¶ 4380Reporting Calendar for Protective Structures
    1. 4380.01The annual cycle
    2. 4380.02Responsibilities
    3. 4380.03Domestic structures
    4. 4380.04Changes of status
    5. 4380.05The trustee's reporting covenant
  10. ¶ 4390Reporting in the Threat Matrix
    1. 4390.01Reporting and the government creditor
    2. 4390.02Reporting and private creditors
    3. 4390.03Reporting and bankruptcy
    4. 4390.04Checklist
    5. 4390.05Cross-references

Chapter 44FATCA, CRS, Beneficial-Ownership Registers and the Corporate Transparency Act

  1. ¶ 4401Overview
    1. 4401.01Scope of the chapter
    2. 4401.02Confidentiality and secrecy distinguished
    3. 4401.03The regimes in outline
    4. 4401.04Relation to other chapters
    5. 4401.05Development of the regimes
    6. 4401.06Effect on planning
  2. ¶ 4410FATCA
    1. 4410.01Structure of the statute
    2. 4410.02Non-financial foreign entities
    3. 4410.03Financial institutions
    4. 4410.04The managed trust
    5. 4410.05Equity interests in a trust that is a financial institution
    6. 4410.06Intergovernmental agreements
    7. 4410.07The trustee-documented trust
    8. 4410.08The owner-documented FFI
    9. 4410.09Switzerland's change of model
    10. 4410.10The United States as a non-participant in CRS
  3. ¶ 4420The Common Reporting Standard
    1. 4420.01The standard
    2. 4420.02Participating jurisdictions
    3. 4420.03Financial institutions and investment entities
    4. 4420.04The discretionary authority qualification
    5. 4420.05Passive non-financial entities
    6. 4420.06Controlling persons
    7. 4420.07The 2023 amendments
    8. 4420.08Mandatory disclosure rules
    9. 4420.09DAC6
  4. ¶ 4430Trusts under FATCA and CRS
    1. 4430.01Who is reported for a trust
    2. 4430.02The trust as a financial institution
    3. 4430.03The trust as a passive non-financial entity
    4. 4430.04Protectors and other controllers
    5. 4430.05Underlying companies
    6. 4430.06Structures with United States trustees
    7. 4430.07Foundations, partnerships and insurance wrappers
    8. 4430.08Classification of typical structures
    9. 4430.09Self-certification and documentation
  5. ¶ 4440Beneficial-Ownership Registers Abroad
    1. 4440.01The international standard
    2. 4440.02The European Union: company registers
    3. 4440.03The 2024 anti-money-laundering package
    4. 4440.04The United Kingdom: the PSC register
    5. 4440.05The United Kingdom: the register of overseas entities
    6. 4440.06The British Virgin Islands
    7. 4440.07The Cayman Islands
    8. 4440.08Other centers
    9. 4440.09The United States
  6. ¶ 4450Trust Registers
    1. 4450.01The European Union
    2. 4450.02The 2024 regime for trusts
    3. 4450.03The creditor as a person with a legitimate interest
    4. 4450.04The United Kingdom: the Trust Registration Service
    5. 4450.05Access to the Trust Registration Service
    6. 4450.06The letter of wishes
    7. 4450.07Offshore trust registers
    8. 4450.08The trustee's duty to disclose its status
    9. 4450.09Consistency across registers
  7. ¶ 4460The Corporate Transparency Act
    1. 4460.01The statute
    2. 4460.02The original reporting rule and the litigation
    3. 4460.03The 2025 interim final rule and the 2026 final rule
    4. 4460.04Trusts and the CTA
    5. 4460.05Protective structures under the current rule
    6. 4460.06Federal reporting for residential real estate
    7. 4460.07Postponement and vacatur of the real estate rule
    8. 4460.08State transparency statutes
  8. ¶ 4470Crypto-Asset Reporting
    1. 4470.01The Crypto-Asset Reporting Framework
    2. 4470.02Commitments and timing
    3. 4470.03The 2023 CRS amendments and digital assets
    4. 4470.04United States broker reporting
    5. 4470.05Digital assets in protective structures
  9. ¶ 4480Planning in a Transparent World
    1. 4480.01The premises
    2. 4480.02Classification at the design stage
    3. 4480.03Alignment with the client's own reporting
    4. 4480.04Choosing fiduciaries
    5. 4480.05Arrangements to avoid
    6. 4480.06Changes of residence
    7. 4480.07Confidentiality that remains
    8. 4480.08Communications with the client
  10. ¶ 4490Transparency in the Threat Matrix
    1. 4490.01Transparency by creditor class
    2. 4490.02Exposure by timing
    3. 4490.03Checklist
    4. 4490.04Cross-references

Chapter 45KYC, AML, Source of Wealth and Sanctions: The Trustee's Gate

  1. ¶ 4501Overview
    1. 4501.01Scope of the chapter
    2. 4501.02The trustee as gatekeeper
    3. 4501.03Relation to asset protection
    4. 4501.04Relation to other chapters
  2. ¶ 4510The Trustee's Customer Due Diligence
    1. 4510.01The FATF standard
    2. 4510.02The parties to be identified
    3. 4510.03The settlor as the provider of funds
    4. 4510.04Professional and non-professional trustees
    5. 4510.05The United Kingdom regulations
    6. 4510.06The offshore centers
    7. 4510.07Timing and refusal
  3. ¶ 4520Source of Wealth and Source of Funds
    1. 4520.01The distinction
    2. 4520.02Establishing source of wealth
    3. 4520.03Establishing source of funds
    4. 4520.04Statutory requirements
    5. 4520.05Source of wealth and solvency
    6. 4520.06Difficult cases
    7. 4520.07Tax compliance
  4. ¶ 4530Politically Exposed Persons and Enhanced Due Diligence
    1. 4530.01The FATF standard
    2. 4530.02The United Kingdom regulations
    3. 4530.03The offshore centers
    4. 4530.04Enhanced due diligence generally
    5. 4530.05Risk factors relevant to protective trusts
    6. 4530.06The FATF view of asset protection trusts
    7. 4530.07Consequences for trust design
  5. ¶ 4540Sanctions
    1. 4540.01Points of contact
    2. 4540.02The United States: blocking and the 50 percent rule
    3. 4540.03Trusts under United States sanctions
    4. 4540.04Reporting and records under OFAC rules
    5. 4540.05The United Kingdom: ownership and control
    6. 4540.06Later decisions on control
    7. 4540.07The European Union
    8. 4540.08Designations affecting existing trusts
  6. ¶ 4550Suspicious Activity Reporting and Tipping Off
    1. 4550.01The United Kingdom principal offences
    2. 4550.02Authorised disclosures and consent
    3. 4550.03Failure to disclose
    4. 4550.04Tipping off
    5. 4550.05The United States
    6. 4550.06The offshore centers
    7. 4550.07The planner's position
  7. ¶ 4560United States AML Obligations
    1. 4560.01Trust companies as banks
    2. 4560.02The program requirement
    3. 4560.03Customer due diligence and beneficial ownership
    4. 4560.04Domestic asset protection trusts
    5. 4560.05Investment advisers
    6. 4560.06Persons outside the Bank Secrecy Act
    7. 4560.07Information sharing
  8. ¶ 4570Proceeds of Crime and the Asset Protection Trust
    1. 4570.01The principle
    2. 4570.02Confiscation and tainted gifts in the United Kingdom
    3. 4570.03Restraint
    4. 4570.04The United States money laundering statutes
    5. 4570.05Forfeiture and relation back
    6. 4570.06Tax evasion
    7. 4570.07Fraud on creditors as a predicate
  9. ¶ 4580Preparing the Client File
    1. 4580.01The purpose of the file
    2. 4580.02Identity
    3. 4580.03Source of wealth
    4. 4580.04Source of funds
    5. 4580.05Solvency and claims
    6. 4580.06Purpose and tax position
    7. 4580.07Screening and adverse information
    8. 4580.08Records retention
  10. ¶ 4590Compliance in the Threat Matrix
    1. 4590.01Compliance by creditor class
    2. 4590.02Exposure by timing
    3. 4590.03Checklist
    4. 4590.04Cross-references

Chapter 46Expatriation and the Exit Tax

  1. ¶ 4601Overview
    1. 4601.01Scope of the chapter
    2. 4601.02Why expatriation belongs in an asset protection treatise
    3. 4601.03The regime in outline
    4. 4601.04Relation to other chapters
  2. ¶ 4610Loss of Citizenship and Residence
    1. 4610.01The statute
    2. 4610.02Intent
    3. 4610.03Renunciation and relinquishment
    4. 4610.04The fee
    5. 4610.05The expatriation date for citizens
    6. 4610.06Long-term residents
    7. 4610.07The renunciation process in practice
    8. 4610.08Second citizenship
  3. ¶ 4620Covered Expatriates
    1. 4620.01The three tests
    2. 4620.02The certification test
    3. 4620.03Exceptions
    4. 4620.04Net worth and structures
    5. 4620.05Relief for certain former citizens
    6. 4620.06The tax-liability test in planning
    7. 4620.07Spouses and joint ownership
  4. ¶ 4630The Mark-to-Market Tax
    1. 4630.01The deemed sale
    2. 4630.02What property is included
    3. 4630.03Grantor trusts
    4. 4630.04Long-term residents' basis
    5. 4630.05Deferral
    6. 4630.06Foreign tax and double taxation
    7. 4630.07Form 8854
  5. ¶ 4640Deferred Compensation, Deferred Accounts and Trusts
    1. 4640.01Excluded property
    2. 4640.02Deferred compensation
    3. 4640.03Specified tax deferred accounts
    4. 4640.04Interests in nongrantor trusts
    5. 4640.05Who is a beneficiary
    6. 4640.06Consequences for protective trusts
    7. 4640.07Incomplete-gift nongrantor trusts
    8. 4640.08Domestic asset protection trusts
  6. ¶ 4650The § 2801 Tax on Gifts and Bequests
    1. 4650.01The tax
    2. 4650.02Covered gifts and bequests
    3. 4650.03Trusts
    4. 4650.04The final regulations
    5. 4650.05Form 708
    6. 4650.06Section 2801 and protective trusts
    7. 4650.07The presumption and the client's family
  7. ¶ 4660Immigration Consequences
    1. 4660.01Status after renunciation
    2. 4660.02The Reed Amendment
    3. 4660.03Scope of the Reed Amendment
    4. 4660.04Passports and tax debts
    5. 4660.05Return visits and residence
  8. ¶ 4670Expatriation and Creditors
    1. 4670.01Debts survive
    2. 4670.02Jurisdiction after expatriation
    3. 4670.03Transfers before expatriation
    4. 4670.04The Internal Revenue Service as creditor
    5. 4670.05Expatriation as a protective strategy
    6. 4670.06Contempt after expatriation
    7. 4670.07Family-law claims
  9. ¶ 4680Planning Before Expatriation
    1. 4680.01The planning sequence
    2. 4680.02Pre-expatriation gifts
    3. 4680.03Structures for the family
    4. 4680.04Protective structures and the exit tax
    5. 4680.05Notifying trustees and payors
    6. 4680.06The advisers
  10. ¶ 4690Expatriation in the Threat Matrix
    1. 4690.01Expatriation by creditor class
    2. 4690.02Exposure by timing
    3. 4690.03Checklist
    4. 4690.04Cross-references

Part VIII: Special Assets and Special Clients

Chapter 47Operating Businesses and Professional Practices

  1. ¶ 4701Overview
    1. 4701.01Scope of the chapter
    2. 4701.02Two distinct problems
    3. 4701.03The limits of entity planning
    4. 4701.04Relation to other chapters
  2. ¶ 4710Business Risk and Entity Choice
    1. 4710.01The business in layers
    2. 4710.02The statutory shield
    3. 4710.03The participation doctrine
    4. 4710.04Statutory limits on veil piercing
    5. 4710.05Choice of entity
    6. 4710.06Capitalization and operations
  3. ¶ 4720Professional Practices
    1. 4720.01The professional's exposure
    2. 4720.02New York
    3. 4720.03Texas
    4. 4720.04California
    5. 4720.05Lawyers and the courts' inherent power
    6. 4720.06Supervisory responsibility
    7. 4720.07Insurance for professionals
  4. ¶ 4730Separating the Operating Business from Its Assets
    1. 4730.01The operating company and the asset company
    2. 4730.02Arm's-length terms
    3. 4730.03The single business enterprise theory
    4. 4730.04Substantive consolidation
    5. 4730.05Reverse veil piercing
    6. 4730.06The controlled group trap
    7. 4730.07Intellectual property and equipment
  5. ¶ 4740Secured Debt and Equity Stripping
    1. 4740.01The technique
    2. 4740.02Attachment and perfection
    3. 4740.03Insider preferences
    4. 4740.04Equitable subordination and recharacterization
    5. 4740.05Conditions for a defensible owner's lien
  6. ¶ 4750The Owner's Interest
    1. 4750.01Routes to the owner
    2. 4750.02The charging order
    3. 4750.03Corporate shares
    4. 4750.04Transfer restrictions and buy-sell agreements
    5. 4750.05Holding the owner's interest in trust
  7. ¶ 4760Guarantees, Successor Liability and Personal Statutory Liability
    1. 4760.01Personal guarantees
    2. 4760.02Managing guarantees
    3. 4760.03Successor liability
    4. 4760.04Withheld taxes
    5. 4760.05Plant closings
    6. 4760.06Multiemployer pension withdrawal liability
  8. ¶ 4770Captives and Retirement Plans
    1. 4770.01Captive insurance companies
    2. 4770.02The micro-captive cases
    3. 4770.03The micro-captive regulations
    4. 4770.04Captives and creditors
    5. 4770.05Retirement plans for practice owners
    6. 4770.06Funding plans as a protective measure
  9. ¶ 4780Sale of the Business
    1. 4780.01Planning before a sale
    2. 4780.02Anticipatory assignment of income
    3. 4780.03Qualified small business stock
    4. 4780.04The buyer as creditor
    5. 4780.05Installment sales to grantor trusts
    6. 4780.06Sequence
  10. ¶ 4790Businesses in the Threat Matrix
    1. 4790.01Businesses by creditor class
    2. 4790.02Exposure by timing
    3. 4790.03Checklist
    4. 4790.04Cross-references

Chapter 48Real Estate

  1. ¶ 4801Overview
    1. 4801.01Scope of the chapter
    2. 4801.02Why real estate is different
    3. 4801.03Relation to other chapters
  2. ¶ 4810Exposure of Real Property
    1. 4810.01The situs rule
    2. 4810.02Fall v. Eastin
    3. 4810.03Judgment liens
    4. 4810.04Consequences of the lien rules
    5. 4810.05Notices of pending action
    6. 4810.06Domestic asset protection trusts holding land in other States
    7. 4810.07Offshore trusts and United States land
  3. ¶ 4820Homestead and Tenancy by the Entirety
    1. 4820.01The homestead
    2. 4820.02Bankruptcy limits on the homestead
    3. 4820.03Tenancy by the entirety
    4. 4820.04Limits of the entireties
    5. 4820.05Homesteads in other States
    6. 4820.06Community property
  4. ¶ 4830Entities for Real Estate
    1. 4830.01Inside and outside liability
    2. 4830.02Charging orders and the single-member company
    3. 4830.03Reverse piercing of real estate companies
    4. 4830.04Series limited liability companies
    5. 4830.05Costs of conveying to an entity
    6. 4830.06Mortgages and due-on-sale clauses
    7. 4830.07Title insurance
    8. 4830.08Co-ownership and land trusts
    9. 4830.09The revocable living trust
  5. ¶ 4840Equity Stripping
    1. 4840.01The technique
    2. 4840.02Insider liens
    3. 4840.03Third-party mortgages
    4. 4840.04Due-on-sale and loan covenants
    5. 4840.05Cross-collateralization and lines of credit
  6. ¶ 4850Out-of-State and Foreign Real Estate
    1. 4850.01Out-of-state real estate
    2. 4850.02Foreign owners of United States real estate
    3. 4850.03State restrictions on foreign ownership
    4. 4850.04Consequences for protective structures
    5. 4850.05Real estate abroad
    6. 4850.06Holding structures for foreign owners
  7. ¶ 4860Tax and Transfer Costs
    1. 4860.01Property tax reassessment
    2. 4860.02The exclusion for sale of a residence
    3. 4860.03Like-kind exchanges
    4. 4860.04Transfer taxes
    5. 4860.05Income tax on entity ownership
    6. 4860.06Estate tax on transfers of land
  8. ¶ 4870Reporting
    1. 4870.01The federal residential real estate rule
    2. 4870.02Geographic targeting orders
    3. 4870.03Effect on planning
    4. 4870.04State and foreign registers
    5. 4870.05Public records and privacy
  9. ¶ 4880Voidable Transfers of Real Estate
    1. 4880.01Planning in order
    2. 4880.02When a transfer of land is made
    3. 4880.03Limitations
    4. 4880.04Transfers to spouses and family on the eve of judgment
    5. 4880.05Remedies against land
    6. 4880.06Conversion into a homestead
    7. 4880.07Vesting in the correct name
    8. 4880.08Transfers to entities for value
  10. ¶ 4890Real Estate in the Threat Matrix
    1. 4890.01Real estate by creditor class
    2. 4890.02Exposure by timing
    3. 4890.03Checklist
    4. 4890.04Cross-references

Chapter 49Digital Assets and Self-Custody

  1. ¶ 4901Overview
    1. 4901.01Scope of the chapter
    2. 4901.02What is different about digital assets
    3. 4901.03Relation to other chapters
  2. ¶ 4910Legal Character of Digital Assets
    1. 4910.01What a digital asset is
    2. 4910.02Property status in the United States
    3. 4910.03Article 12 of the Uniform Commercial Code
    4. 4910.04The take-free rule
    5. 4910.05Enactment of Article 12
    6. 4910.06Wyoming
    7. 4910.07England and Wales
    8. 4910.08New Zealand
    9. 4910.09Situs and jurisdiction
  3. ¶ 4920Custody Models
    1. 4920.01The models
    2. 4920.02Multisignature and multiparty computation
    3. 4920.03Exchange insolvency: Celsius
    4. 4920.04Other failures
    5. 4920.05Bailment custody
    6. 4920.06Regulatory developments
    7. 4920.07Stablecoins and freezing
    8. 4920.08Choosing among the models
    9. 4920.09Custody terms to review
  4. ¶ 4930Digital Assets in Trust
    1. 4930.01The trustee must control the keys
    2. 4930.02Custody arrangements for trusts
    3. 4930.03Directed trusts
    4. 4930.04Prudent investment
    5. 4930.05State trust company statutes
    6. 4930.06Offshore trusts
    7. 4930.07Provisions for the trust instrument
    8. 4930.08Staking and yield
  5. ¶ 4940Creditor Remedies
    1. 4940.01Routes to the asset
    2. 4940.02Turnover and contempt
    3. 4940.03The privilege against self-incrimination
    4. 4940.04Wyoming's statute
    5. 4940.05Freezing orders and persons unknown
    6. 4940.06Code that no one owns
    7. 4940.07Tracing on the blockchain
    8. 4940.08Divorce
    9. 4940.09Discovery of digital assets
  6. ¶ 4950Bankruptcy
    1. 4950.01Property of the estate
    2. 4950.02Exemptions
    3. 4950.03Disclosure and discharge
    4. 4950.04Valuation
    5. 4950.05Withdrawals before a custodian's bankruptcy
  7. ¶ 4960Tax and Reporting
    1. 4960.01Broker reporting
    2. 4960.02Foreign accounts
    3. 4960.03Income tax character
    4. 4960.04Reporting and protection
    5. 4960.05Gift and estate tax
  8. ¶ 4970Death and Incapacity
    1. 4970.01The problem of access
    2. 4970.02Fiduciary access
    3. 4970.03Key succession
    4. 4970.04Lost keys at death
    5. 4970.05Incapacity
  9. ¶ 4980Planning
    1. 4980.01The steps
    2. 4980.02Timing and documentation
    3. 4980.03Choosing the custodian and its jurisdiction
    4. 4980.04Avoiding retained control
    5. 4980.05Entities holding digital assets
    6. 4980.06Tokenized securities and real assets
    7. 4980.07Ongoing administration
    8. 4980.08Assets that should not be protected
  10. ¶ 4990Digital Assets in the Threat Matrix
    1. 4990.01Digital assets by creditor class
    2. 4990.02Exposure by custody model
    3. 4990.03Exposure by timing
    4. 4990.04Checklist
    5. 4990.05Cross-references

Chapter 50Non-U.S. Families, U.S. Persons Abroad and Forced Heirship

  1. ¶ 5001Overview
    1. 5001.01Scope of the chapter
    2. 5001.02The cross-border problem
    3. 5001.03Relation to other chapters
  2. ¶ 5010Non-U.S. Families with U.S. Assets
    1. 5010.01The estate tax on nonresident aliens
    2. 5010.02Situs
    3. 5010.03The gift tax on nonresident aliens
    4. 5010.04Treaties
    5. 5010.05Holding companies
    6. 5010.06Other risks of holding companies
    7. 5010.07Protective aspects
    8. 5010.08Lifetime gifts by nonresident aliens
  3. ¶ 5020U.S. Beneficiaries and U.S. Trusts for Non-U.S. Families
    1. 5020.01Foreign grantors
    2. 5020.02Non-grantor foreign trusts and throwback
    3. 5020.03Loans and use of property
    4. 5020.04Immigrants
    5. 5020.05Reporting gifts and distributions
    6. 5020.06United States trusts for non-United States families
    7. 5020.07Domesticating a foreign trust
  4. ¶ 5030Forced Heirship
    1. 5030.01Where forced heirship claims are decided
    2. 5030.02France
    3. 5030.03The European Union Succession Regulation
    4. 5030.04The Hague Trusts Convention
    5. 5030.05Offshore firewall statutes
    6. 5030.06New York
    7. 5030.07Other systems
  5. ¶ 5040Marital Property Regimes
    1. 5040.01Community property in the United States
    2. 5040.02Migration between regimes
    3. 5040.03The European Union Matrimonial Property Regulation
    4. 5040.04Consequences for protective planning
    5. 5040.05Marital agreements for international couples
  6. ¶ 5050U.S. Persons Abroad
    1. 5050.01The rules that follow citizens abroad
    2. 5050.02Local pensions and savings vehicles
    3. 5050.03Passive foreign investment companies
    4. 5050.04Foreign accounts and assets
    5. 5050.05Local protective planning
    6. 5050.06Expatriation
    7. 5050.07Dual citizens and accidental Americans
  7. ¶ 5060Recognition of Trusts in Civil-Law Courts
    1. 5060.01Three questions
    2. 5060.02The Convention's parties
    3. 5060.03France
    4. 5060.04Switzerland
    5. 5060.05Other jurisdictions
    6. 5060.06Drafting for recognition
  8. ¶ 5070Enforcement Across Borders
    1. 5070.01Judgments against family members abroad
    2. 5070.02Tax collection across borders
    3. 5070.03Family claims across borders
    4. 5070.04Discovery across borders
    5. 5070.05Political and sanctions risk
  9. ¶ 5080Planning
    1. 5080.01The steps
    2. 5080.02Non-United States families with United States assets
    3. 5080.03Families subject to forced heirship
    4. 5080.04United States persons abroad
    5. 5080.05United States trusts for non-United States settlors
    6. 5080.06Coordination of advisers
  10. ¶ 5090Cross-Border Families in the Threat Matrix
    1. 5090.01Cross-border families by creditor class
    2. 5090.02Exposure by asset location
    3. 5090.03Checklist
    4. 5090.04Cross-references

Chapter 51Client Profiles: Medicine, Founders, Executives and High-Risk Professions

  1. ¶ 5101Overview
    1. 5101.01Scope of the chapter
    2. 5101.02Why profiles matter
    3. 5101.03A recurring lesson
    4. 5101.04Relation to other chapters
  2. ¶ 5110Method of Profiling
    1. 5110.01The elements of a profile
    2. 5110.02Frequency and the probable future creditor
    3. 5110.03Severity and insurance
    4. 5110.04Lag and the tail
    5. 5110.05Character of the claims
    6. 5110.06Composition and trajectory of wealth
    7. 5110.07Summary of the profiles
  3. ¶ 5120Physicians and Dentists
    1. 5120.01The physician's exposure
    2. 5120.02Claim frequency
    3. 5120.03Payments above limits
    4. 5120.04Damages caps
    5. 5120.05Government claims
    6. 5120.06Overpayments
    7. 5120.07Nondischargeability
    8. 5120.08Practice obligations and partners
    9. 5120.09Divorce
  4. ¶ 5130Founders
    1. 5130.01The founder's position
    2. 5130.02Securities enforcement
    3. 5130.03Sripetch and the scope of disgorgement
    4. 5130.04Nondischargeability of securities debts
    5. 5130.05Employment and tax obligations
    6. 5130.06Guarantees
    7. 5130.07Liquidity and insider trading constraints
    8. 5130.08Planning before liquidity
  5. ¶ 5140Executives
    1. 5140.01The executive's position
    2. 5140.02Clawback under Rule 10D-1
    3. 5140.03Clawback under section 304
    4. 5140.04Clawback and the protective structure
    5. 5140.05Exculpation and indemnification
    6. 5140.06Directors' and officers' insurance
    7. 5140.07ERISA fiduciary liability
    8. 5140.08Regulatory and criminal exposure
  6. ¶ 5150Lawyers, Accountants and Financial Professionals
    1. 5150.01Professional liability
    2. 5150.02Defalcation and nondischargeability
    3. 5150.03Financial advisers and brokers
    4. 5150.04Aiding and abetting
    5. 5150.05Accountants
    6. 5150.06Client funds
  7. ¶ 5160Developers and Contractors
    1. 5160.01The developer's position
    2. 5160.02Recourse carve-outs
    3. 5160.03Solvency covenants
    4. 5160.04Construction trust fund statutes
    5. 5160.05Construction trust funds in bankruptcy
    6. 5160.06The developer's protective structure
    7. 5160.07Planning for developers
  8. ¶ 5170Other High-Risk Clients
    1. 5170.01Owners of vehicles
    2. 5170.02Owners of aircraft and vessels
    3. 5170.03Landlords
    4. 5170.04Entertainers and athletes
    5. 5170.05Public officials
    6. 5170.06Founders of crypto and financial technology businesses
    7. 5170.07The self-employed client of modest means
  9. ¶ 5180Retirees and Inheritors
    1. 5180.01The shift from earning to preserving
    2. 5180.02Medicaid and the look-back
    3. 5180.03Estate recovery
    4. 5180.04Elder financial abuse
    5. 5180.05Pledges and estate obligations
    6. 5180.06Inheritors
  10. ¶ 5190Profiles in the Threat Matrix
    1. 5190.01The profiles by creditor class
    2. 5190.02Exposure by timing
    3. 5190.03Checklist
    4. 5190.04Cross-references

Part IX: Practice

Chapter 52Intake and the Solvency Analysis

  1. ¶ 5201Overview
    1. 5201.01Scope of the chapter
    2. 5201.02Why intake decides the plan
    3. 5201.03Three questions
    4. 5201.04Relationship to other chapters
  2. ¶ 5210The Intake Interview
    1. 5210.01The sequence
    2. 5210.02The rule against assisting fraud
    3. 5210.03The duty to inquire
    4. 5210.04The 2023 amendment
    5. 5210.05Asset protection is not routine estate planning
    6. 5210.06State ethics opinions
    7. 5210.07Identity and source of wealth
    8. 5210.08The questionnaire
    9. 5210.09The interview
  3. ¶ 5220Screening for Existing and Foreseeable Creditors
    1. 5220.01Who is a creditor
    2. 5220.02Present and future creditors
    3. 5220.03The official illustration
    4. 5220.04The badges of fraud
    5. 5220.05The classic pattern
    6. 5220.06The hidden creditor: guarantees
    7. 5220.07The forum as a creditor issue
    8. 5220.08The searches
  4. ¶ 5230The Solvency Tests
    1. 5230.01Every test must be passed
    2. 5230.02The balance-sheet test
    3. 5230.03The presumption from nonpayment
    4. 5230.04Unreasonably small assets and ability to pay
    5. 5230.05The Bankruptcy Code
    6. 5230.06Fair valuation: going concern and market evidence
    7. 5230.07Applying the tests to individuals
  5. ¶ 5240Valuing Contingent and Unliquidated Claims
    1. 5240.01The problem
    2. 5240.02Xonics
    3. 5240.03Covey: no cap at net worth
    4. 5240.04Pending litigation
    5. 5240.05The method in practice
    6. 5240.06Guarantees
    7. 5240.07Contingent assets
  6. ¶ 5250Exempt Assets and the Solvency Calculation
    1. 5250.01The exclusion
    2. 5250.02Spendthrift trust interests
    3. 5250.03Applying the exclusion
    4. 5250.04The paradox of exempt wealth
    5. 5250.05Conversions are transfers
    6. 5250.06Exceptions to exemptions
  7. ¶ 5260Solvency Affidavits
    1. 5260.01Statutory affidavits
    2. 5260.02Wyoming's insurance covenant
    3. 5260.03The function of the affidavit
    4. 5260.04A true affidavit is not enough
    5. 5260.05The gap in the affidavits
    6. 5260.06Evidentiary weight
    7. 5260.07Criminal and professional exposure
    8. 5260.08Offshore trustees
  8. ¶ 5270Red Flags and Declining the Engagement
    1. 5270.01The red flags
    2. 5270.02Red flags specific to asset protection
    3. 5270.03Proceed, limit or decline
    4. 5270.04The lawyer's own exposure
  9. ¶ 5280Documenting the Analysis
    1. 5280.01The solvency file
    2. 5280.02Contemporaneous records
    3. 5280.03The cost of reconstruction
    4. 5280.04The worksheet
    5. 5280.05The memorandum of reasons
    6. 5280.06Discoverability
    7. 5280.07Updating the analysis
  10. ¶ 5290Intake in the Threat Matrix
    1. 5290.01By creditor class
    2. 5290.02By timing
    3. 5290.03Checklist
    4. 5290.04Cross-references

Chapter 53Engagement Terms and the Planning File

  1. ¶ 5301Overview
    1. 5301.01Scope of the chapter
    2. 5301.02The engagement letter as evidence
    3. 5301.03The duty to inquire
    4. 5301.04Relationship to other chapters
  2. ¶ 5310Identifying the Client
    1. 5310.01The possible clients
    2. 5310.02Joint representation of spouses
    3. 5310.03The disclosure agreement
    4. 5310.04Why disclosure matters more in asset protection
    5. 5310.05Separate representation
    6. 5310.06The trustee as client
    7. 5310.07Entities
    8. 5310.08Third-party payors
  3. ¶ 5320Scope and Limits of the Engagement
    1. 5320.01Limited scope
    2. 5320.02What cannot be excluded
    3. 5320.03Not assisting fraud
    4. 5320.04Writing
    5. 5320.05Tax advice and the obsolete disclaimer
    6. 5320.06Litigation counsel
    7. 5320.07Continuing obligations
  4. ¶ 5330Client Representations and the Solvency Covenant
    1. 5330.01The core terms
    2. 5330.02Representations of fact
    3. 5330.03The solvency covenant
    4. 5330.04Reliance on the client
    5. 5330.05Indemnities
    6. 5330.06Statements to third parties
    7. 5330.07Tone
  5. ¶ 5340Privilege and the Crime-Fraud Exception
    1. 5340.01The exception
    2. 5340.02The procedure
    3. 5340.03State codifications
    4. 5340.04The leading case on the retention letter
    5. 5340.05Concealment from creditors
    6. 5340.06Badges of fraud as the prima facie showing
    7. 5340.07The whole file
    8. 5340.08A narrower view
    9. 5340.09Waiver by the client
  6. ¶ 5350Adviser Liability
    1. 5350.01Civil claims under the voidable transfer statutes
    2. 5350.02Conspiracy
    3. 5350.03Statutory protection in some States
    4. 5350.04Criminal exposure
    5. 5350.05Discipline
  7. ¶ 5360Fees and Retainers
    1. 5360.01The fee as a transfer
    2. 5360.02Types of retainer
    3. 5360.03Large advance fees
    4. 5360.04Bankruptcy review
    5. 5360.05Fees from tainted funds
    6. 5360.06Practice
    7. 5360.07Fiduciary roles
  8. ¶ 5370The Planning File
    1. 5370.01Purpose
    2. 5370.02Contents
    3. 5370.03The know-your-client memorandum
    4. 5370.04What the file should not contain
    5. 5370.05Retention
    6. 5370.06Ownership of the file
    7. 5370.07Security
  9. ¶ 5380Withdrawal and Termination
    1. 5380.01Mandatory withdrawal
    2. 5380.02Permissive withdrawal
    3. 5380.03The statement of reasons
    4. 5380.04Noisy withdrawal
    5. 5380.05Opinions and comfort letters
    6. 5380.06Termination in the ordinary course
    7. 5380.07Fiduciary roles on withdrawal
  10. ¶ 5390Engagement Terms in the Threat Matrix
    1. 5390.01By creditor class
    2. 5390.02By timing
    3. 5390.03Checklist of engagement terms
    4. 5390.04Cross-references

Chapter 54Maintaining the Plan: Formalities and Annual Review

  1. ¶ 5401Overview
    1. 5401.01Scope of the chapter
    2. 5401.02The premise
    3. 5401.03Three doctrines
    4. 5401.04Relationship to other chapters
  2. ¶ 5410Why Formalities Matter
    1. 5410.01Formalities as evidence
    2. 5410.02The Jersey origin
    3. 5410.03The bilateral test of sham
    4. 5410.04The English application
    5. 5410.05Ineffective disposition: the Privy Council
    6. 5410.06Powers as property in divorce
    7. 5410.07Retained control in the United States
  3. ¶ 5420Entity Maintenance
    1. 5420.01The alter ego standard
    2. 5420.02Formalities in limited liability companies
    3. 5420.03Which formalities count
    4. 5420.04Commingling and personal use
    5. 5420.05Annual reports and taxes
    6. 5420.06Forfeiture and revival
    7. 5420.07The registered agent
    8. 5420.08Transactions with the owner
  4. ¶ 5430Trust Administration
    1. 5430.01The trustee's role
    2. 5430.02Records and reports
    3. 5430.03The qualified trustee in a domestic asset protection trust
    4. 5430.04Distributions
    5. 5430.05Letters of wishes
    6. 5430.06Protectors and other offices
    7. 5430.07Minutes
  5. ¶ 5440The Settlor's Conduct
    1. 5440.01Conduct as the creditor's evidence
    2. 5440.02Self-settled trusts and retained control
    3. 5440.03Third-party trusts treated as the settlor's property
    4. 5440.04Nominee liens
    5. 5440.05Residences and personal-use assets
    6. 5440.06Statements to third parties
    7. 5440.07Loans to the settlor
  6. ¶ 5450Tax and Reporting Maintenance
    1. 5450.01The reporting obligations
    2. 5450.02The annual calendar
    3. 5450.03Penalties
    4. 5450.04The FBAR due date
    5. 5450.05Beneficial ownership reporting
    6. 5450.06State and offshore filings
    7. 5450.07Consistency
  7. ¶ 5460Changes in Circumstances
    1. 5460.01Why plans drift
    2. 5460.02The rule against post-claim restructuring
    3. 5460.03Marriage
    4. 5460.04Divorce
    5. 5460.05Relocation
    6. 5460.06Business changes
    7. 5460.07Changes in offices
    8. 5460.08Decanting, migration and amendment
    9. 5460.09Changes in the law
  8. ¶ 5470Insurance Review
    1. 5470.01Insurance as the first layer
    2. 5470.02Named insureds
    3. 5470.03Exclusions
    4. 5470.04Limits and severity
    5. 5470.05Insurer strength
    6. 5470.06Notice of claims
  9. ¶ 5480The Annual Review
    1. 5480.01Purpose and form
    2. 5480.02Facts
    3. 5480.03Solvency
    4. 5480.04Entities
    5. 5480.05Trusts
    6. 5480.06Reporting and insurance
    7. 5480.07Recommendations and record
  10. ¶ 5490Maintenance in the Threat Matrix
    1. 5490.01By creditor class
    2. 5490.02By timing
    3. 5490.03Checklist
    4. 5490.04Cross-references

Chapter 55Failed Plans: What the Cases Teach

  1. ¶ 5501Overview
    1. 5501.01Scope of the chapter
    2. 5501.02Reading the failed cases
    3. 5501.03The recurring facts
    4. 5501.04Relationship to other chapters
  2. ¶ 5510Transfers Made Too Late
    1. 5510.01The sequence of a late plan
    2. 5510.02The leading case
    3. 5510.03A guarantee about to be called
    4. 5510.04Transfers during trial
    5. 5510.05Transfers after a verdict
    6. 5510.06Transfers of someone else's money
    7. 5510.07Transfers between tort and judgment
  3. ¶ 5520Retained Control and the Impossibility Defense
    1. 5520.01The defense and the answer
    2. 5520.02The Supreme Court framework
    3. 5520.03Self-created impossibility
    4. 5520.04Withholding the trust instrument
    5. 5520.05Control through an advisory committee
    6. 5520.06Domestic trusts as alter egos
  4. ¶ 5530Self-Settled Trusts in the Debtor's Home Forum
    1. 5530.01The home-forum problem
    2. 5530.02Conduits
    3. 5530.03The domestic asset protection trust in another State's bankruptcy court
    4. 5530.04Even in the trust's own State
    5. 5530.05The common-law rule after death
    6. 5530.06Exclusive jurisdiction clauses
    7. 5530.07Divorce in the home forum
  5. ¶ 5540Entity Plans That Failed
    1. 5540.01The pattern
    2. 5540.02The single-member company in Florida
    3. 5540.03The single-member company in bankruptcy
    4. 5540.04Reverse piercing under Delaware law
    5. 5540.05New entities after judgment
    6. 5540.06Layered structures
  6. ¶ 5550Contempt and Incarceration
    1. 5550.01Consequences beyond the assets
    2. 5550.02The elements
    3. 5550.03The limit of coercion
    4. 5550.04The confinements
    5. 5550.05Sanctions short of confinement
  7. ¶ 5560Criminal Exposure
    1. 5560.01When planning becomes a crime
    2. 5560.02Concealment in bankruptcy
    3. 5560.03Perjury referrals
    4. 5560.04Trust schemes sold as tax shelters
    5. 5560.05The line between planning and crime
  8. ¶ 5570Advisers Sanctioned
    1. 5570.01The adviser's exposure
    2. 5570.02Conspiracy in New Jersey
    3. 5570.03No aiding and abetting under the Florida statute
    4. 5570.04Promoter injunctions and penalties
    5. 5570.05Advisers in the record
    6. 5570.06Professional discipline
  9. ¶ 5580Plans That Held
    1. 5580.01Four features
    2. 5580.02Validity upheld, value counted
    3. 5580.03The trust corpus untouched
    4. 5580.04A domestic trust in its home State
    5. 5580.05The offshore forum holds
    6. 5580.06What the successful plans did
  10. ¶ 5590The Lessons in the Threat Matrix
    1. 5590.01The patterns
    2. 5590.02By creditor class
    3. 5590.03By timing
    4. 5590.04Checklist
    5. 5590.05Cross-references

Appendices

Appendix AThreat Matrix Worksheets

  1. ¶ A01Overview
    1. A01.01Purpose of the worksheets
    2. A01.02The seven worksheets
    3. A01.03The worksheet as evidence
    4. A01.04Who completes the worksheets
    5. A01.05Conventions
    6. A01.06Reproduction
  2. ¶ A10Worksheet 1: Client, Purposes and Assets
    1. A10.01Function
    2. A10.02Part 1: Client and family
    3. A10.03Part 2: Purposes of the plan
    4. A10.04Part 3: Asset inventory
    5. A10.05Completing Part 3
    6. A10.06Verification
  3. ¶ A20Worksheet 2: Creditor Profile
    1. A20.01Function
    2. A20.02Part 1: Exposure by activity
    3. A20.03Part 2: Known claims and searches
    4. A20.04Part 3: Classification
    5. A20.05Completing Worksheet 2
    6. A20.06Insurance as the first layer
  4. ¶ A30Worksheet 3: Timing Position
    1. A30.01Function
    2. A30.02Part 1: Position by class
    3. A30.03Assigning the position
    4. A30.04Part 2: Limitation and seasoning
    5. A30.05Completing Part 2
    6. A30.06Part 3: Evidence of the position
    7. A30.07Transfers at T1 and later
  5. ¶ A40Worksheet 4: Forum and Custodians
    1. A40.01Function
    2. A40.02Part 1: Parties and locations
    3. A40.03Part 2: The three questions
    4. A40.04Completing Part 2
    5. A40.05Part 3: Control points
    6. A40.06Reading Part 3
  6. ¶ A50Worksheet 5: Tool Ratings
    1. A50.01Function
    2. A50.02Part 1: Base ratings at T0
    3. A50.03Part 2: Adjustments
    4. A50.04Part 3: The plan as a whole
    5. A50.05Part 4: Addressing the weakest cell
    6. A50.06Comment
  7. ¶ A60Worksheet 6: Solvency Snapshot
    1. A60.01Function
    2. A60.02Part 1: Balance sheet
    3. A60.03Valuing contingent claims
    4. A60.04Part 2: The tests
    5. A60.05Part 3: Reserve for known claims
    6. A60.06Comment
  8. ¶ A70Worksheet 7: Reassessment
    1. A70.01Function
    2. A70.02Part 1: Changes since the last review
    3. A70.03Part 2: Formalities check
    4. A70.04Part 3: Result
    5. A80.01The facts
    6. A80.02Worksheet 2 (extract)
    7. A80.03Worksheet 3 (extract)
    8. A80.04Worksheet 5 (extract)
    9. A80.05Worksheet 6 (extract)
    10. A80.06Result
    11. A80.07Comment

Appendix BJurisdiction Comparison Grid

  1. ¶ B01Overview
    1. B01.01Purpose of the grid
    2. B01.02The seven dimensions
    3. B01.03How to read the grids
    4. B01.04Currency
    5. B01.05The grids
  2. ¶ B10Offshore Trust Statutes Compared
    1. B10.01Grid B-1: the Cook Islands, Nevis and Belize
    2. B10.02Comment
    3. B10.03Grid B-2: other offshore jurisdictions
    4. B10.04Reading Grid B-2
  3. ¶ B20Civil-Law and Foundation Jurisdictions
    1. B20.01Grid B-3: Switzerland
    2. B20.02Comment
    3. B20.03Grid B-4: foundations
    4. B20.04Comment
  4. ¶ B30Domestic Trust States
    1. B30.01Grid B-5: the principal states
    2. B30.02State income tax
    3. B30.03Grid B-6: every self-settled trust state
    4. B30.04The nonresident settlor
  5. ¶ B40Entity Jurisdictions
    1. B40.01Four approaches
    2. B40.02Grid B-7: principal entity jurisdictions
    3. B40.03Comment
  6. ¶ B50Enforcement Environment
    1. B50.01Grid B-8: recognition and enforcement
    2. B50.02The Hague Trusts Convention
    3. B50.03Grid B-9: procedural barriers
    4. B50.04Freezing relief
  7. ¶ B60Tax, Reporting and Standing
    1. B60.01Grid B-10: U.S. tax and reporting by structure
    2. B60.02Automatic exchange
    3. B60.03Grid B-11: international standing
  8. ¶ B70Selection
    1. B70.01Grid B-12: first choice by dominant threat
    2. B70.02Questions before choosing
    3. B70.03Comment

Appendix CStatutory Texts

  1. ¶ C01Note on the Texts
    1. C01.01Purpose
    2. C01.02Sources and currency
    3. C01.03Conventions
    4. C01.04The Uniform Voidable Transactions Act
  2. ¶ C10The Statute of 13 Elizabeth
    1. C10.0113 Eliz. c. 5 (1571), §§ I–VII ("An act against fraudulent deeds, alienations, &c.")
  3. ¶ C20The Uniform Voidable Transactions Act (as enacted in Washington)
    1. C20.01Wash. Rev. Code §§ 19.40.011 (selected definitions), 19.40.021, 19.40.041, 19.40.051, 19.40.071, 19.40.081, 19.40.091, 19.40.101
  4. ¶ C30The Bankruptcy Code
    1. C30.0111 U.S.C. §§ 541(c)(2), 544(b)(1), 548(a)(1), 548(e), 522(o), 522(p)(1)
  5. ¶ C40The Delaware Qualified Dispositions in Trust Act
    1. C40.0112 Del. C. §§ 3570–3571
    2. C40.0212 Del. C. § 3572
    3. C40.0312 Del. C. § 3573
    4. C40.0412 Del. C. § 3574
    5. C40.0512 Del. C. §§ 3575–3576
  6. ¶ C50Wyoming, Nevada and Charging-Order Statutes
    1. C50.01Wyo. Stat. Ann. §§ 4-10-506(b)–(c), 4-10-510, 4-10-514, 4-10-517
    2. C50.02Nev. Rev. Stat. §§ 166.040, 166.170
    3. C50.036 Del. C. § 18-703
    4. C50.04Wyo. Stat. Ann. § 17-29-503
    5. C50.05Fla. Stat. § 605.0503 (2026)
  7. ¶ C60The Cook Islands
    1. C60.01International Trusts Act 1984
  8. ¶ C70Nevis and Belize
    1. C70.01Nevis International Exempt Trust Ordinance, Cap. 7.03(N), ss 26, 30, 50, 55, 61
    2. C70.02Belize Trusts Act, Cap. 202, ss 4 and 7
  9. ¶ C80Switzerland
    1. C80.01Federal Act on Debt Enforcement and Bankruptcy (SchKG / DEBA), SR 281.1, arts 285–288a
    2. C80.02Federal Act on Private International Law (PILA / IPRG), SR 291, arts 149a–149e
  10. ¶ C90The Hague Trusts Convention
    1. C90.01Convention on the Law Applicable to Trusts and on their Recognition (1 July 1985), arts 2, 6, 7, 8, 11, 15, 16, 18

Appendix DState Exemption, Charging-Order and Criminal-Transfer Surveys

  1. ¶ D01Overview
    1. D01.01Purpose
    2. D01.02The five surveys
    3. D01.03Sources and limits
    4. D01.04Which state's exemptions apply
  2. ¶ D10Federal Bankruptcy Exemptions
    1. D10.01The federal list
    2. D10.02Caps that apply to every debtor
    3. D10.03Comment
  3. ¶ D20Homestead and Tenancy by the Entirety
    1. D20.01The survey
    2. D20.02Reading the table
  4. ¶ D30Life Insurance, Annuities and Wages
    1. D30.01The survey
    2. D30.02Comment
  5. ¶ D40Retirement Assets
    1. D40.01The survey
    2. D40.02Comment
  6. ¶ D50Charging Orders
    1. D50.01The survey
    2. D50.02Reading the table
  7. ¶ D60Criminal-Transfer Statutes
    1. D60.01The survey
    2. D60.02The pattern
    3. D60.03Federal statutes
  8. ¶ D70Using the Surveys
    1. D70.01The debtor's state
    2. D70.02Recording the result
    3. D70.03Change

Appendix EClause Library

  1. ¶ E01Using the Clauses
    1. E01.01Purpose
    2. E01.02What a clause can and cannot do
    3. E01.03Governing law
    4. E01.04Conventions
    5. E01.05The clauses
  2. ¶ E10Spendthrift and Discretionary Provisions
    1. E10.01Spendthrift provision
    2. E10.02Discretionary distributions
    3. E10.03No mandatory interest; bankruptcy declaration
    4. E10.04Protective interest
  3. ¶ E20Trustee Independence and Duress
    1. E20.01Qualified and independent trustee
    2. E20.02Duress
    3. E20.03Foreign orders
    4. E20.04Trustee's costs and directions
  4. ¶ E30Flight and Migration
    1. E30.01Event of Duress defined
    2. E30.02Change of governing law and place of administration
    3. E30.03Relocation of assets
  5. ¶ E40Protector Provisions
    1. E40.01Appointment and independence of the protector
    2. E40.02Protector's consent powers
    3. E40.03Suspension of a protector under duress
    4. E40.04Fiduciary character of powers
  6. ¶ E50Settlor Exclusion and Letters of Wishes
    1. E50.01Exclusion of the settlor during duress
    2. E50.02Settlor's retained powers
    3. E50.03Letter of wishes
  7. ¶ E60Purposes, Representations and Exception Creditors
    1. E60.01Recital of purposes
    2. E60.02Settlor's representations
    3. E60.03Support obligations
    4. E60.04Tax reimbursement
  8. ¶ E70Entity Provisions
    1. E70.01Charging order as exclusive remedy
    2. E70.02Transfers and assignees
    3. E70.03Distributions in manager's discretion
    4. E70.04Independent manager
  9. ¶ E80Engagement Clauses
    1. E80.01Purposes and scope
    2. E80.02Client's representations
    3. E80.03Withdrawal

Appendix FForms

  1. ¶ F01Using the Forms
    1. F01.01The four forms
    2. F01.02Order of use
    3. F01.03Statutory forms
    4. F01.04The forms as evidence
  2. ¶ F10Form 1: Solvency Affidavit
    1. F10.01Purpose
    2. F10.02The form
    3. F10.03Notes on Form 1
  3. ¶ F20Form 2: Schedule of Assets and Liabilities
    1. F20.01Purpose
    2. F20.02Part 1: Assets
    3. F20.03Part 2: Liquidated liabilities
    4. F20.04Part 3: Contingent and unliquidated liabilities
    5. F20.05Part 4: Income and expenses
    6. F20.06Part 5: Summary
    7. F20.07Notes on Form 2
  4. ¶ F30Form 3: Engagement Letter
    1. F30.01Purpose
    2. F30.02The form
    3. F30.03Notes on Form 3
  5. ¶ F40Form 4: Intake Questionnaire
    1. F40.01Purpose
    2. F40.02Part 1: Personal and family information
    3. F40.03Part 2: Claims, incidents and disputes
    4. F40.04Part 3: Assets and liabilities
    5. F40.05Part 4: Source of wealth and tax status
    6. F40.06Part 5: Purposes
    7. F40.07Notes on Form 4

Appendix GReporting Calendar

  1. ¶ G01Overview
    1. G01.01Purpose
    2. G01.02Dates
    3. G01.03Sources
    4. G01.04Who is responsible
    5. G01.052026 figures
  2. ¶ G10The Annual Federal Calendar
    1. G10.01Month by month
    2. G10.02Form 3520-A is the first deadline of the year
    3. G10.03Form 3520 is required every year
    4. G10.04The FBAR
  3. ¶ G20Event-Driven Filings
    1. G20.01Filings triggered by a transaction
    2. G20.02Beneficial ownership reporting
    3. G20.03Transfers after the plan is in place
  4. ¶ G30Penalties
    1. G30.01The penalty table
    2. G30.02Reasonable cause
    3. G30.03Assessment without deficiency procedures
  5. ¶ G40State Entity Maintenance
    1. G40.01Annual reports and taxes
    2. G40.02Registered agents
    3. G40.03Domestic trusts
  6. ¶ G50Offshore Maintenance
    1. G50.01Registration and renewal
    2. G50.02Comment
  7. ¶ G60FATCA, CRS and Registers
    1. G60.01Reporting by the trustee
    2. G60.02The United States and the CRS
    3. G60.03Registers
  8. ¶ G70Annual Review
    1. G70.01The review checklist
    2. G70.02Comment

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