Seasoned Is Not Enough.

The case is nearly thirty years old, and it has lost none of its force. A federal bankruptcy court in Alaska looked straight through two Belizean trusts — set up well before any judgment existed — and held them void. Not because they were late. Because they were hollow. The settlor had given nothing up. The trustee had done nothing at all. And a foreign-law clause printed on a trust deed did not bind a court that held the debtor and his assets within its reach (Brown v. Higashi, No. A95-00200-DMD (Bankr. D. Alaska Mar. 11, 1996)).

What makes Brown worth a careful second look in 2026 is not the result against the Browns. It is what the case reveals, in the negative, about how a properly built foreign asset-protection trust (FAPT) is actually supposed to work — a point the marketing material almost never states honestly. Sound FAPT planning does not try to win the domestic lawsuit. It assumes the opposite.

S. Wayne Brown was no naïf. He was a certified public accountant and a successful businessman — exactly the sort of client who reads the brochures and acts early. In 1989 and 1990 he and his wife, Carrol, created a set of self-settled trusts. Two of them — the Leones Company and American International Retail — were declared to be executed in Belize and governed by Belizean law. A third, the CAW Family Trust, was created under American law.

On the face of it, the Browns had done what we counsel: they had planned in advance. The trusts were settled in 1989–1990. The judgment that later threatened them — a roughly $1.4 million tort award won by Vickey Higashi against the Browns and their business, Nome Commercial Company — was not entered until February 1995, some five years later. By the crude measure of the calendar, this was not a deathbed transfer at all.

And yet the court voided the transfers as fraudulent and dismissed the Belize trusts as shams. To understand why is to understand what asset protection actually requires — and why so much of what is sold under that name is worthless.

The court’s reasoning did not turn on timing. It turned on control. The Browns had purported to vest their assets in a trustee and a foreign “creator,” but the paperwork described a relationship that never existed in fact. Mr. Brown personally communicated with Merrill Lynch about the assets. He signed the checks that bought the insurance policies and annuities. He could withdraw funds at will. The supposed trustee, meanwhile, never signed a document and never exercised a particle of control.

That is the whole case in a sentence. A trust is not a filing cabinet with a foreign address. It is a genuine transfer of property to someone else, who genuinely controls it for someone else’s benefit. Where the settlor keeps the chequebook, keeps the phone line to the broker, and keeps the power to take the money back whenever he likes, he has not created a trust. He has created a costume. The court said as much, and bluntly:

This is the trap that catches careful, early planners. They believe that because they acted in good time, the structure will hold. But a structure that is seasoned and also a sham gets no credit for the seasoning. The earliness buys nothing if the settlor never truly let go.

The second pillar of Brown is just as important, and it is the one offshore marketing works hardest to obscure. Both Belizean deeds carried the usual choice-of-law clause: this trust shall be interpreted and construed under the laws of Belize. The Browns no doubt believed those words transported the dispute to a jurisdiction engineered to defeat creditors.

The court was unmoved. Applying ordinary Alaska conflict-of-laws principles — the “most significant relationship” test — it held that it was inappropriate to apply Belizean law to the controversy at all. Alaska had the substantial connections: the debtors, the creditor, the judgment, the conduct. Belize had a statute and a postbox. The court was candid about why the Browns had reached for that statute in the first place, observing that “Belize is a popular trust jurisdiction precisely because it allows the types of fraudulent transfers that are unenforceable in America.” Having named the purpose, the court declined to serve it, and voided the transfers under Alaska’s fraudulent-transfer statutes (Alaska Stat. §§ 34.40.010 and 34.40.110).

The lesson generalises well beyond Belize and well beyond 1996. A foreign-law clause is a powerful tool when the foreign court is the one actually deciding the case. It is close to worthless when a domestic court, with personal jurisdiction over the settlor and practical reach over the assets, is the one holding the gavel.

Here is the distinction that Brown throws into sharp relief, and it is the heart of the matter. Properly structured FAPT planning does not set out to win the case in Anchorage, or New York, or anywhere else in the United States. It presumes the domestic court will rule against the settlor and against the trust. That ruling is expected. It is, for the most part, beside the point. The plan is not built to prevent a U.S. judgment; it is built to make that judgment a hollow trophy.

Two things — and only two things working together — produce that result.

The first is situs: the assets must sit in a jurisdiction whose courts will not recognise or enforce the foreign (U.S.) judgment, and will instead force the creditor to begin again, from zero, under deliberately punishing local standards. The Cook Islands is the archetype. Under the Cook Islands International Trusts Act 1984 (as amended), a Cook Islands court will not simply rubber-stamp a U.S. judgment against the trust; the creditor must re-litigate the fraudulent-transfer claim locally, where the statute requires proof of fraudulent intent beyond reasonable doubt — the criminal standard — and imposes short, claimant-hostile limitation periods (broadly, an action is barred where the disposition occurred more than two years after the creditor’s cause of action accrued, or where the creditor fails to commence proceedings within one year of the disposition) that frequently close the door before the creditor can even file.

Nevis has built a comparable wall by statute (the Nevis International Exempt Trust Ordinance), which likewise declines to enforce foreign judgments against Nevis trusts and imposes a heightened standard and short limitation period for fraudulent-transfer claims litigated locally.

The second is genuine, proper trust planning: a real, independent foreign trustee who actually administers the assets; a true relinquishment of control by the settlor; and seasoning. Without this, situs is meaningless — and this is precisely where the Browns, and a more famous set of debtors after them, came undone.

The proof that situs alone is not enough — that retained control plus in-personam jurisdiction remains fatal — is FTC v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999), the “Anderson” case. Denyse and Michael Anderson had done what the Browns did not: they put their money in a Cook Islands trust, in the hardest situs in the world. On the situs question, they were miles ahead of the Browns.

It did not save them. When the district court ordered them to repatriate the assets, the Andersons pleaded impossibility — the trust, they said, was designed so that they could not bring the money home. The Ninth Circuit was unimpressed and affirmed their civil contempt. The reason matters enormously: the Andersons had retained control as co-trustees and trust protectors, so they plainly retained the power to influence the trust, and the court had personal jurisdiction over them. A debtor who stands before a U.S. court, and who has kept his hand on the trust’s controls, can be ordered to act regardless of where the corpus nominally sits — and jailed for contempt if he refuses. The Andersons lost.

Read together, Brown and Anderson state the rule in full. Brown had neither leg: the assets were effectively onshore (U.S. brokerage accounts the Browns personally ran) and the settlor retained complete control, so the Belize label was decoration over a domestic res the court could reach directly. Anderson had the first leg but not the second: world-class situs, undone by retained control and in-personam jurisdiction. Situs without relinquishment is not protection. Relinquishment without situs is not protection. Only the two together shift the battlefield.

It is the point the industry too rarely says plainly. A creditor who wins in Alaska — or anywhere in the United States — has won a domestic judgment. Whether that judgment is worth anything depends entirely on what happens next, in the place where the assets actually live and are actually administered.

Where the planning is real, the answer is often “very little.” A properly built FAPT does not hand the creditor the trust by the simple expedient of a U.S. court order, because the trustee is independent and offshore and is not subject to that order, and because the situs court will not enforce the judgment but will instead make the creditor prove a fresh fraudulent-transfer case to a criminal standard, against a clock that may already have run. The U.S. victory becomes pyrrhic: real on paper, unenforceable in fact, and bought at a cost that frequently exceeds anything the creditor can ever recover.

The Browns never reached that ground. The U.S. court had both the debtor and the res within its practical grasp: the assets sat in accounts the Browns controlled from Alaska, and the trustee was a fiction who would do whatever Mr. Brown’s lawyer drafted. There was no offshore wall to make Vickey Higashi’s victory pyrrhic, because there was, in substance, nothing offshore at all. Had the assets been genuinely placed beyond a U.S. court’s reach — real situs, real trustee, real relinquishment, real seasoning — Higashi might have won her judgment and still collected nothing on it. That, and not winning the underlying suit, is what sound FAPT planning is for.

A necessary caution travels with this point, and we make it without softening: none of this makes any structure “untouchable” or “bulletproof.” Situs shifts the forum and the standard; it does not abolish the creditor. Determined claimants litigate offshore and sometimes prevail. Courts evolve. And — as Anderson shows in the starkest possible terms — the entire edifice collapses the instant the settlor is shown to have kept control. The honest claim is narrower and more durable than the brochures’: situs plus genuine relinquishment plus seasoning moves the fight onto far less favourable ground for the creditor. It does not guarantee the creditor loses.

Read in the negative, the two cases together are a precise specification for a structure that works.

1. It is seasoned.The plan is settled and funded years before any claim is foreseeable, when there is no creditor to hinder and therefore no fraudulent intent to infer. The Browns had this — and it was not enough on its own, which is exactly why the remaining tests matter so much.
2. It is irrevocable and discretionary.The settlor surrenders the switch. He cannot reach back for the money when trouble comes, because the transfer was complete and the benefit is discretionary rather than guaranteed. The Browns failed here decisively: Mr. Brown could withdraw at will. So did the Andersons, in substance, through their protector and co-trustee powers — and it cost them their liberty.
3. It is independently administered.A real, functioning trustee — not the settlor in a borrowed hat — holds and administers the assets, makes the decisions, signs the documents, and can and does say no to the settlor. A trustee who answers to the settlor is not an answer to a repatriation order; he is the rope the court uses to bind the settlor in contempt.
4. It is genuinely situated abroad. The assets and their administration sit, in fact and not merely on paper, in a jurisdiction that will not enforce the foreign judgment and will make the creditor start over under punishing local rules. A U.S. brokerage account with a Belize cover sheet is not situs. It is the Brown sham.

Contrast the Browns’ arrangement with a structure built to these tests, and the difference is not subtle.

The right-hand column is not aspirational, and it is not a promise of any particular result. It describes the ordinary architecture of a properly settled discretionary trust, genuinely administered by an independent trustee in a jurisdiction whose law does the situs work — the same family of architecture we have described before in connection with Chishti. There, the lesson was about timing: do not transfer on the eve of a claim. Here, the lesson is about control and situs: do not retain what you claim to have given away, and do not mistake a foreign address for a foreign forum.

Situs at the trust level is often paired, at the operating level, with a robust charging-order remedy. Where the trust’s holding vehicle is a properly formed limited liability company in a jurisdiction with strong charging-order protection, a creditor who reaches a member’s interest does not get the assets, the management rights, or a forced sale — only a charge against distributions that an independent trustee may simply decline to make. This is the protection Nevis has codified, in legislation Lighthouse Trust itself helped shape: under the Nevis Limited Liability Company Ordinance, the charging order is the creditor’s sole and exclusive remedy against a member’s interest; it is expressly not a lien; distributions are reachable only if and when actually made; and the order itself lapses on a non-renewable three-year sunset. We note it as the companion concept, not as a cure-all — its strength, like everything else here, turns on genuine structure and current local law.

It would be easy to file Brown v. Higashi under “offshore trusts don’t work.” That reading is lazy and wrong. Brown is not a case about geography. It is a case about substance and situs — and about the gap between the two when a structure is hollow. The Browns failed not because they went to Belize, and not because they planned too late. They failed because they never left: the trustee was a fiction, the control was retained, and the “offshore” assets sat in accounts they ran from Alaska. There was nothing for a foreign court to protect, and so a domestic court took it all.

The discipline that Chishti, Brown, and Anderson together describe is the whole of our craft. Plan early, when no claim is on the horizon. Then — and this is the part the careful planner so often misses — actually relinquish, to a trustee who is real and who acts, and genuinely situate the assets where a foreign judgment is not the end of the story but the beginning of a much harder fight for the creditor. A sound FAPT does not promise you will win in the U.S. court. It assumes you will lose there — and is built so that losing there need not mean losing the assets.