Cover Page

Title Page

Copyright Page

About the Authors

Table of Contents

CHAPTER 1—WHAT IS INTEGRATED ESTATE PLANNING AND ASSET PROTECTION PLANNING?

¶101 Overview—What Is Integrated Estate Planning and Asset Protection Planning?

.01 Definition of Asset Protection Planning

.02 Why Asset Protection Planning?

.03 Goals of Asset Protection Planning

.04 The Foundations of Integrated Estate Planning

.05 Engel Ladder of Asset Protection Planning Tools

.06 The Engel Maxims of Asset Protection Planning

.07 What Asset Protection Is Not

.08 Does Asset Protection Work?

¶115 Definition of Asset Protection Planning

¶125 Why Asset Protection Planning?

.01 Expanding Theories of Liability

.02 Concerns Over High Jury Awards

.03 Concerns with Traditional Forms of Protection

.04 Jury of One’s Peers

.05 Deep-Pocket Syndrome

.06 Once You’ve Been Sued, You’ve Lost

¶135 Goals of Asset Protection Planning

.01 Create a User-Friendly Plan

.02 Deter Litigation

.03 Provide Incentive for an Early and Cheap Settlement

.04 Level the Litigation Playing Field

.05 Enhance One’s Bargaining Position

.06 Provide Options as the Game Is Played

.07 Win the Game

¶145 Foundations of Asset Protection Planning

¶155 The Engel Ladder of Asset Protection Planning Tools

¶165 The Engel Maxims of Asset Protection Planning

.01 Better to Look Ahead and Plan Than to Look Behind and Regret

.02 Asset Protection Planning Should Be a Way of Life, Not a Reaction to a Problem

.03 Asset Protection Planning Is a Vaccine, Not a Cure

.04 Don’t Sweat the Last Three Percent

.05 Hope the Asset Protection Plan Will Prove to Be a Waste of Time and Money

.06 There Is No Such Thing as the Perfect Offshore Financial Center

.07 There Is No One “Right” Way to Design an Asset Protection Plan

.08 If You Can Reach Your Assets, So Can Your Creditors

.09 Once You’ve Been Sued, You’ve Lost

.10 The Golden Rule

¶175 What Asset Protection Planning Is Not

.01 Not an Excuse or Vehicle for Evading Taxes

.02 Not Based on Hiding Assets

.03 Not an Excuse to Defraud Creditors

¶185 Does Asset Protection Planning Work?

CHAPTER 2—ASSET PROTECTION PLANNING AND FRAUDULENT TRANSFERS

¶201 Overview—Asset Protection Planning and Fraudulent Transfer Law

.01 Fraud vs. Fraudulent Transfer

.02 Is the Transfer a Fraudulent Transfer?

.03 Categories of Creditors and Their Remedies

.04 The Threshold Fraudulent Transfer Question in Asset Protection Planning

¶215 Fraud vs. Fraudulent Transfer

.01 Fraud

.02 Fraudulent Transfers

.03 Fraud Compared to Fraudulent Transfer

¶225 Is the Transfer a Fraudulent Transfer?

.01 Actual Intent to Hinder, Delay, or Defraud Any Creditor

.02 Constructively Fraudulent Transfers

.03 A Case Study in Actual Fraudulent Intent and Constructively Fraudulent Transfers

.04 Fraudulent Conveyances in the Bankruptcy Setting

¶235 Categories of Creditors and Their Remedies

.01 Present Creditor

.02 Subsequent (Future) Creditor

.03 Future Potential Creditor

¶245 The Threshold Fraudulent Transfer Question in Asset Protection Planning

CHAPTER 3—GIFTING AS A PLANNING TOOL

¶301 Overview—Gifting as a Planning Tool

.01 Gifts to Someone Other than a Spouse

.02 Gifts to a Spouse

.03 Gifting Through Trusts

¶315 Gifts to Someone Other Than a Spouse

.01 Loss of Control

.02 Donee’s Change of Circumstances

.03 Gift Tax Consequences

¶325 Gifts to a Spouse

.01 Loss of Control

.02 Spouse Subject to a Lawsuit

.03 The Gift May Be Considered Nonmarital Property in the Event of Divorce

.04 Doctrine of “Resulting Trust”

.05 Community Property—Loss of Double Step Up in Basis on Death

.06 Danger of Secret Side Agreements

¶335 Gifting Through Trusts

CHAPTER 4—JOINT OR CONCURRENT OWNERSHIP AS A PLANNING TOOL

¶401 Overview—Joint or Concurrent Ownership as a Planning Tool

.01 Joint vs. Separate Debt

.02 Types of Property

.03 Types of Joint Ownership

¶415 Joint vs. Separate Debt

¶425 Types of Property

¶435 Types of Joint Ownership

.01 Tenancy in Common

.02 Joint Tenancy (with Right of Survivorship)

.03 Tenancy by the Entirety

.04 Community Property

CHAPTER 5—EXEMPTIONS AS A PLANNING TOOL

¶501 Overview—Exemptions as a Planning Tool

.01 Planning Considerations

.02 Bankruptcy Exemptions

.03 Important State Exemptions

.04 The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

¶515 Planning Considerations

.01 Certain Creditors Not Subject to State Exemptions

.02 Conversion of Property vs. Transfer of Property

.03 Fraudulent Conversion

.04 Exemptions Are Not Cast in Stone

¶525 Bankruptcy Exemptions

¶535 Important State Exemptions

.01 Prerequisites for Exemptions

.02 Homestead Exemption

.03 Case Law on Homestead Exemption

.04 Exemption for Life Insurance and Annuity Contracts

.05 Wage and Earnings Exemptions

.06 Nonwage Income Exemptions

.07 Exemptions for Personal, Household, and Other Possessions

.08 Section 529 Plans

¶545 Bankruptcy Reform (2005)

.01 The Homestead Exemption

.02 Personal Property Exemption

.03 Exemption for Life Insurance and Annuities

.04 Exemption for Retirement Benefits

.05 Exemption for Qualified State Tuition Programs

CHAPTER 6—FOREIGN INSURANCE AND ANNUITIES IN ASSET PROTECTION PLANNING

¶601 Overview—Foreign Insurance and Annuities in Asset Protection Planning

.01 Foreign Insurance and Annuities Protected Under a Foreign Jurisdiction’s Laws

.02 Swiss Insurance and Annuities—Protective Statutes

.03 Creditor Access to Swiss Insurance and Annuities

.04 Not a Full “Plan” In and of Itself

.05 Protected Insurance and Annuities as Part of an Overall Integrated Estate Plan—Pros and Cons

¶615 Foreign Insurance and Annuities Protected Under a Foreign Jurisdiction’s Laws

¶625 Swiss Insurance and Annuities—Protective Statutes

¶635 Creditor Access to Swiss Insurance and Annuities

¶645 Protected Insurance and Annuities as Part of an Overall Integrated Estate Plan—Pros and Cons

CHAPTER 7—INSURANCE AS A PLANNING TOOL

¶701 Overview—Insurance as a Planning Tool

.01 General Business Insurance Policies

.02 Professional Liability Insurance Policies

.03 Personal Liability Insurance Policies

.04 Asset Protection Planning

.05 Captive Insurance Companies

¶715 General Business Insurance Policies

.01 Events Outside the Scope of Employment

.02 Intentional Torts by an Owner or Employee

.03 Claims by a Member of a Protected Class

.04 Contract Claims

.05 Working at Home

.06 Director Liability, Charitable Activities, or Homeowner Associations

¶725 Professional Liability Insurance Policies

.01 Grossly Negligent Acts

.02 Willful or Wanton Misconduct and Punitive Damages

.03 Strict Product Liability

.04 Employee Must Be Specifically Listed

.05 Impact of the Insurance Company’s Financial Woes

¶735 Personal Liability Insurance Policies

.01 Automotive Insurance Policies

.02 Umbrella Insurance Policies

.03 Homeowner Insurance Policies

¶745 Asset Protection Planning

¶755 Captive Insurance Companies

.01 Section 501(c)(15) Company

.02 Premium Limitation and Income Tax Exclusions

.03 Deductibilty of Premiums Paid to the Section 501(c)(15) Company

.04 Estate Planning

.05 Offshore Companies

.06 Foreign Corporation Income Tax Issues

.07 Reduction in Premiums

.08 Conclusion

CHAPTER 8—FAMILY LIMITED PARTNERSHIPS AND LIMITED LIABILITY COMPANIES AS PLANNING TOOLS

¶801 Overview—Family Limited Partnerships and Limited Liability Companies as Planning Tools

.01 Charging Order Protection

.02 Phantom Income to Judgment Creditor

.03 Charging Order as Sole Remedy

.04 Asset-Level Tax Pitfalls

.05 Partnership Level Tax Pitfalls

.06 Divorce Issues

.07 Charging Order Protection, Real Estate, and Other Nonliquid Assets

.08 Corporate Ownership of General Partner’s Interest

.09 The Limited Liability Company and Other “Progeny” of the Limited Partnership

.10 Foreign Limited Liability Company Alternatives

¶815 Charging Order Protection

.01 Revised Uniform Partnership Act

.02 Origin of Charging Order Protection

.03 Control of the Family Limited Partnership

.04 Short-Term Asset Protection Tool

¶825 Phantom Income to Judgment Creditor

¶835 Charging Order as Sole Remedy

.01 Sole Remedy by Case Law

.02 Sole Remedy by Statute

.03 Foreclosure Sale of the Limited Partnership Interest

.04 Sham, Alter Ego, or Agent of the Partner

¶845 Assets with Negative Tax Consequences

.01 S Corporation Stock

.02 Annuities

.03 Personal Residence

¶855 Partnership Tax Pitfalls

.01 Investment Company Pitfall

.02 Net Debt Relief Greater Than Basis Issue

.03 Distribution of Marketable Securities Issue

¶865 Divorce Issues

¶875 Charging Order Protection, Real Estate, and Other Nonliquid Assets

¶885 Corporate Ownership of General Partner’s Interest

¶890 The Limited Liability Company and Other “Progeny” of the Limited Partnership

.01 Charging Order Protection

.02 Federal Tax Issues Relevant to an LLC

.03 The Single Member LLC—Panacea or Pandora’s Box?

.04 Series Limited Liability Companies

¶895 Foreign Limited Liability Company Alternatives

.01 Advantages of a Foreign Limited Liability Company

.02 Disadvantages of a Foreign Limited Liability Company

.03 Developments With Respect to Foreign Limited Liability Companies

CHAPTER 9—TRUSTS UNDER STATE LAW FOR ASSET PROTECTION PLANNING

¶901 Overview—Trusts Under State Law for Asset Protection Planning

.01 Background of the Trust

.02 The Uniform Trust Code

.03 Theories for Recovery Against a Domestic Trust

.04 Spendthrift Trusts

.05 Self-Settled Spendthrift Trusts

.06 Beneficiary Favored Trusts

¶905 Background of the Trust

¶915 The Uniform Trust Code

.01 Overview

.02 Summary of Code Provisions

.03 Uniform Trust Code Sections Applicable to Integrated Estate Planning Trusts

.04 Miscellaneous Code Considerations

¶925 Theories for Recovery Against a Domestic Trust

.01 Trust Funded as a Result of a Fraudulent Conveyance

.02 Settlor Retains Too Much Control

.03 Settlor Retains Too Much of an Interest

.04 The Trust Is Something Other Than a Trust

¶935 Spendthrift Trusts

¶945 Self-Settled Spendthrift Trusts

.01 Introduction

.02 Alaska

.03 Delaware

.04 Nevada

.05 Select Nuances of Domestic Statutory Provisions

¶955 Beneficiary Favored Trusts

.01 Introduction

.02 Control

.03 Independent Co-Trustee

.04 Trustee/Beneficiary

.05 Creditor Protection

.06 Tax Reduction

.07 Transfer of Assets to BFT

.08 Purchase and Lease of Equipment

.09 Business Opportunities

.10 Husband and Wife BFTs

.11 Offshore BFT

CHAPTER 10—THE FOREIGN INTEGRATED ESTATE PLANNING TRUST AS A PLANNING TOOL

¶1001 Overview—The Foreign Integrated Estate Planning Trust as a Planning Tool

.01 The Case for Foreign Asset Protection Planning

.02 Reasons to Use a Foreign Jurisdiction for an Integrated Estate Plan

.03 Structure of a Foreign Integrated Estate Planning Trust

.04 Misconceptions About Foreign Integrated Estate Planning Trusts

.05 Funding and Administration of the Foreign Integrated Estate Planning Trust Structure

.06 The Distance Factor

.07 Forcing the Final Legal Battle Abroad

.08 Selecting a Foreign Jurisdiction

.09 Challenges to Integrated Estate Planning Trusts

.10 Tax Considerations for Foreign Integrated Estate Planning Trusts

¶1015 The Case for Foreign Asset Protection Planning

¶1020 Reasons to Use a Foreign Jurisdiction for an Integrated Estate Plan

.01 Increased Ability of Settlor to Retain Benefit and Control

.02 Foreign Trusts Not Automatic Targets

.03 Foreign Trusts Erect Practical Barriers

.04 Psychological Barriers

.05 Foreign Trusts Are Ultimately More Protective

.06 Sovereign Status; No Preemption Principle

¶1025 Structure of a Foreign Integrated Estate Planning Trust

.01 Trustees

.02 Protector

.03 Beneficiaries

.04 Domestic Family Limited Partnership

.05 Coordinating the Foreign Integrated Estate Planning Trust with the Estate Plan

.06 Planning Structures with Multiple IEPTs and FLPs

.07 Location of the Assets

.08 Selection of a Foreign Trustee

.09 Investing Abroad

.10 Settlor Benefits and Control—Drafting Considerations

¶1035 Misconceptions About Foreign Integrated Estate Planning Trusts

.01 Misconception #1—Transferring Assets Abroad

.02 Misconception #2—Full Control Shifts to a Foreign Party

.03 Misconception #3—The Foreign Integrated Estate Planning Trust Is Just for the Very Wealthy

.04 Misconception #4—Trust Assets Vulnerable to the Trustee

.05 Misconception #5—Changes in the Foreign Jurisdiction’s Law

.06 Misconception #6—Tax Reporting Requirements Are a Burden

.07 Misconception #7—A Few Reported Cases Show Foreign IEPTs Do Not Work

¶1045 Funding and Administration of the Foreign Integrated Estate Planning Trust Structure

.01 Funding the Structure

.02 Hot vs. Cool Assets

.03 Proper Booking of Contributions

.04 Administration of the Foreign IEPT Structure

¶1055 The Distance Factor

.01 More Distance, More Protection

.02 Less Distance, Still Highly Protective

¶1065 Forcing the Final Legal Battle Abroad

.01 Protective Measures

.02 Fraudulent Transfer Issues

.03 The Flight Clause and the Duress Clause

.04 Real Estate and Other Immovable Assets

¶1075 Selecting a Foreign Jurisdiction

.01 Statutory Specificity—Pros and Cons

.02 Comparison of Available Protective Legislation

¶1085 Challenges to Integrated Estate Planning Trusts

¶1095 Tax Considerations for Foreign Integrated Estate Planning Trusts

.01 Income Tax—Grantor Trust

.02 Foreign or Domestic Trust for Tax Purposes

.03 Gift and Estate Tax

.04 Reporting Requirements for a Foreign IEPT

.05 Foreign Account Tax Compliance Act (“FATCA”)

CHAPTER 11—COMPARING STATE LAW AND FOREIGN LAW TRUSTS

¶1101 Overview—Comparing State Law and Foreign Law Trusts

¶1115 The Full Faith and Credit Clause of the U.S. Constitution

¶1125 Supremacy Clause of the U.S. Constitution

¶1135 Conflicts of Law and Choice of Law Issues

¶1145 Increased Ability of the Settlor to Retain Benefit and Control

¶1155 A Foreign IEPT Is Not an Automatic Target

¶1165 A Foreign IEPT Erects Practical Barriers

¶1175 The Foreign Trust Law Will Be Ultimately More Protective

CHAPTER 12—CHOICE OF LAW AND CONFLICT OF LAW ISSUES

¶1201 Overview—Choice of Law and Conflict of Law Issues

¶1215 A Case Example—Which Jurisdiction’s Law Will Apply?

¶1225 Traditional Conflicts of Laws Principles and Restatement (Second)

.01 Personal Property

.02 Real Property

¶1235 Departure from the General Rule

¶1245 Public Policy Considerations

CHAPTER 13—OTHER FOREIGN-BASED PLANNING TOOLS

¶1301 Overview—Other Foreign-Based Planning Tools

.01 Hybrid Company—In General

.02 Hybrid Company and Asset Protection

.03 U.S. Income Taxation of a Hybrid Company

.04 Contract Hybrid Company

.05 Civil Law Foundations—In General

.06 Civil Foundation and Asset Protection

.07 U.S. Taxation of a Civil Foundation

.08 Foreign Integrated Estate Planning Trusts vs. Civil Law Foundations

.09 Foundations in Common Law Jurisdictions

¶1315 Hybrid Company—In General

.01 Control

.02 Letter of Wishes

¶1325 Hybrid Company and Asset Protection

.01 Restrictions on Voting Rights of Guarantee Members

.02 Restrictions on Transfer of Guarantee Members’ Interest

.03 Forcing the Final Legal Battle Abroad

¶1335 U.S. Income Taxation of a Hybrid Company

.01 Trust

.02 Corporation

.03 Partnership

¶1345 Contract Hybrid Company

.01 Tax Benefits Claimed by Certain Trusts and Companies Similar in Design to Hybrid Companies

.02 Claims by Some That the Contract Hybrid Company Is Not a Trust

.03 Tax Consequences of a Contract Hybrid Company

.04 Tax Consequences—Comparing the Domestic Contract Trust to the Foreign Contract Hybrid Company

¶1355 Civil Law Foundations—In General

.01 Definition

.02 Comparing a Civil Foundation to a Common Law Trust

.03 Creation, Funding, and Administration of the Foundation

.04 Assets

.05 Foundation Council

.06 Beneficiaries of the Foundation

.07 Rights and Obligations of the Founder

.08 Registration

.09 Popular Civil Law Jurisdictions and Terminology

¶1365 Civil Foundations and Asset Protection

.01 Permissible Purpose of the Foundation

.02 Supervision by Governmental Authorities

.03 Control by the Founder and Drafting Considerations

¶1375 U.S. Taxation of a Civil Foundation

¶1385 Foreign Integrated Estate Planning Trusts vs. Civil Law Foundations

.01 Trusts Are Commonly Found in Civil Law Countries, But Not the Reverse

.02 A Common Law Creditor Will Be Unfamiliar with a Civil Foundation

.03 Statutory Specificity Under Trust Law

.04 Ordre Publique

.05 Tax Rates

.06 Forced Heirship

.07 The Drafting Attorney Becomes the Client

.08 Real Estate Located in a Civil Law Country

¶1390 Foundations in Common Law Jurisdictions

.01 Antigua and Barbuda

.02 Isle of Man

.03 Guernsey

.04 Anguilla

.05 Cook Islands

CHAPTER 14—EXPATRIATION AS AN ASSET PROTECTION TOOL

¶1401 Overview—Expatriation as an Asset Protection Tool

.01 Asset Protection

.02 Worldwide U.S. Taxation—In General

.03 “Severing the Eight Tentacles of the Tax Octopus”

.04 Tax Exile—Taxation for Expatriates in General

.05 Expatriation—Income Tax—Computations and Illustrations

¶1415 Asset Protection

.01 Personal Jurisdiction

.02 Depositions and Gathering of Evidence

.03 Nonrecognition of U.S. Judgments

.04 Foreign Banking Laws

.05 Expatriation in Combination with a Foreign Integrated Estate Planning Trust

¶1425 Worldwide U.S. Taxation—In General

.01 Foreign Tax Credits

¶1435 “Severing the Eight Tentacles of the Tax Octopus”

.01 Residence

.02 Domicile

.03 Citizenship

.04 Marital Status

.05 Income Issues

.06 Location of Assets

.07 Timing

.08 Status of Beneficiaries

¶1445 Tax Exile—Taxation for Expatriates in General

.01 Mark-to-Market Taxation

.02 Subchapter S Termination

¶1455 Expatriation—Gift and Estate Tax—Computations and Illustrations

CHAPTER 15—PROTECTION OF RETIREMENT BENEFITS

¶1501 Overview—Protection of Retirement Benefits

.01 General Exceptions Depend on Who the Creditor Is

.02 State Exemptions—In General

.03 General Classifications of Plans

.04 Welfare Benefit Plans Under the Employee Retirement Income Security Act of 1974

.05 Pension Plans Under the Employee Retirement Income Security Act of 1974

.06 Plans Not Under the Employee Retirement Income Security Act of 1974

.07 Bankruptcy Considerations

.08 Asset Protection Planning with Regard to Retirement Plans

¶1515 General Exceptions Depend on Who the Creditor Is

.01 Spouse

.02 Internal Revenue Service

.03 The Retirement Plan Is the Creditor

¶1525 State Exemptions—In General

¶1535 General Classifications of Plans

¶1545 Welfare Benefit Plans Under the Employee Retirement Income Security Act of 1974

¶1555 Pension Plans Under the Employee Retirement Income Security Act of 1974

.01 Requirements for Protection Under ERISA

.02 How Much Protection Is Provided by ERISA?

¶1565 Plans Not Under the Employee Retirement Income Security Act of 1974

¶1575 Bankruptcy Considerations

.01 Bankruptcy Code Section 541(c)(2)

.02 Bankruptcy Code Sections 522(b)(3)(C), 522(d)(10)(E) and 522(d)(12)

.03 Inherited IRAs

¶1585 Asset Protection Planning with Regard to Retirement Planning

.01 Charging Order Protection

.02 Rollover of IRAs into a Qualified Plan

.03 Moving the Final Legal Battle Abroad

.04 Disqualification of the Plan

.05 Treatment of Contributions to and Distributions from the Plan

.06 Foreign Grantor Trust

.07 Protection of the Plan Assets from Creditor Claims

.08 Moving Plan Assets Abroad

CHAPTER 16—ETHICAL, CIVIL, AND CRIMINAL CONSIDERATIONS FOR THE ASSET PROTECTION PLANNER

¶1601 Overview—Ethical, Civil, and Criminal Considerations for the Asset Protection Planning

.01 Interviewing Prospective Clients

.02 Fraudulent Transfer Law

.03 Potential Ethical Exposure

.04 Potential Civil Liability

.05 Bankruptcy Crimes

.06 The Money Laundering Control Act

.07 Mail and Wire Fraud

.08 Racketeer Influenced and Corrupt Organizations Act

.09 Miscellaneous Federal Acts

.10 U.S. and Worldwide Anti-Money Laundering and Anti-Terrorism Legislation

¶1615 Interviewing Prospective Clients

¶1625 Fraudulent Transfer Law

¶1635 Potential Ethical Exposure

.01 Fraud

.02 Fraudulent Conveyances

.03 Criminal Acts

.04 State Ethics Committee Opinions

¶1645 Potential Civil Liability

.01 Malpractice Claims

.02 Fraud Claims

.03 Conspiracy Claims

.04 Aiding and Abetting

.05 Racketeer Influenced and Corrupt Organizations Act (RICO)

¶1655 Bankruptcy Crimes

.01 Title 18 U.S.C. §152(1)—Concealing Property of the Bankruptcy Estate

.02 18 U.S.C. §152(7)—Transferring or Concealing Property in Contemplation of Bankruptcy

.03 18 U.S.C. §157—Bankruptcy Fraud

¶1665 The Money Laundering Control Act

.01 The Crime of Money Laundering

.02 Offenses

.03 Specified Unlawful Activities

.04 Piggyback on Other Federal Crimes

.05 Areas of Particular Concern to the Asset Protection Planner

¶1675 Mail and Wire Fraud

¶1685 Racketeer Influenced and Corrupt Organizations Act

¶1695 Miscellaneous Federal Acts

.01 Crime Control Act of 1990

.02 Tax Crimes

.03 Aiding and Abetting

.04 Conspiracy to Defraud the United States

.05 Misprision of a Felony

.06 Federal Debt Collection Procedures Act

.07 The Sentencing Risk

¶1699 U.S. and Worldwide Anti-Money Laundering and Anti-Terrorism Legislation

.01 The Patriot Act

.02 Gatekeepers Initiative

.03 St. Christopher and Nevis

.04 Isle of Man

.05 Cook Islands

.06 Switzerland

CHAPTER 17—CONTEMPT OF COURT PRINCIPLES AND ASSET PROTECTION PLANNING

¶1701 Overview—Contempt of Court Principles and Asset Protection Planning

.01 Contempt of Court Defined

.02 Impossibility of Performance: A Complete Defense

.03 Self-Created Impossibility: Not a Defense

.04 Asset Protection Planning Principles and Contempt Law

.05 Select Cases Involving Asset Protection Trusts and Contempt Rulings

¶1715 Contempt of Court Defined

¶1725 Impossibility of Performance: A Complete Defense

¶1735 Self-Created Impossibility: Not a Defense

¶1745 Asset Protection Planning Principles and Contempt Law

¶1755 Select Cases Involving Asset Protection Trusts and Contempt Rulings

.01 The Eulich Decision

.02 The Anderson Case

.03 The Lawrence Case

.04 The Bilzerian Case

.05 The Grant Case

.06 The Solow Case

.07 Morris v. Morris

CHAPTER 18—TRUST LITIGATION ISSUES

¶1801 Overview—Trust Litigation Issues

.01 Client Confidences

.02 The Work Product Doctrine

.03 Conflicts of Interests

.04 Dealing with a Subpoena—Expect the Unexpected?

.05 Service of Process, Jurisdiction, and Related Matters

.06 Forum Non Conveniens

.07 Comity vs. Deference

.08 Cross-Jurisdictional Slippage

.09 Hague Conventions Applicable to Foreign Integrated Estate Planning Trusts

.10 Prejudgment Attachments—Offshore and in the United States

.11 Reported Cases Involving Foreign IEPT Challenges

¶1815 Client Confidences

.01 Introduction

.02 The Evidentiary Rule and the Ethical Rule

.03 Working With Other Professionals

.04 Exceptions to the Confidentiality Rule

.05 Authorized Disclosure and Distinguishable Situations

¶1825 The Work Product Doctrine

.01 Introduction

.02 Purpose and Scope

.03 The Seminal U.S. Supreme Court Case

.04 Categories of Work Product

.05 Protection of an Attorney’s Mental Impressions

.06 Exceptions to Work Product

.07 Obtaining the Work Product of a Plaintiff’s Attorney to Prove Defendent’s Defense

.08 Separate Assertion and Waiver

¶1835 Conflict of Interests

¶1845 Dealing with a Subpoena—Expect the Unexpected?

.01 Subpoena/Subpoena Duces Tecum

.02 What to Do Once the Subpoena Has Been Served

.03 Permission to Produce Documents

.04 Privilege Log

.05 The In Camera Process

¶1855 Service of Process, Jurisdiction, and Related Matters

.01 Basic Concepts

.02 Service of Process on and Jurisdiction over Domestic Parties

.03 Service of Process on and Jurisdiction over Foreign Parties

.04 Trustees and Beneficiaries as “Necessary Parties” to Litigation

.05 Trustee Involvement and Costs

.06 Disputes Between Beneficiaries to the Same Trust

.07 Trustee Costs; Pre-emptive Costs

¶1865 Forum Non Conveniens

.01 Introduction

.02 Case Law

¶1875 Comity vs. Deference

.01 Introduction

.02 Comity

.03 Deference

.04 Restatement (Second) of the Law of Foreign Relations—Section 40

¶1885 Cross-Jurisdictional Slippage

¶1890 Hague Conventions Applicable to Foreign Integrated Estate Planning Trusts

.01 Introduction

.02 The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters

.03 The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters

.04 The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters

¶1895 Prejudgment Attachments—Offshore and in the United States

.01 Mareva Orders (Offshore)

.02 Mareva Case Law

.03 Challenging a Mareva Order

.04 Breaching a Mareva Order

.05 Anton Pillar Orders (Offshore)

.06 Asset Freezing in the United States

.07 Uniform Asset Freezing Orders Act (2012)

.08 Impact of Prejudgment Attachments

¶1899 Reported Cases Involving Foreign IEPT Challenges

CHAPTER 19—LEVEL II PLANNING: ASSET PROTECTION FOR THE OPERATING BUSINESS AND PROFESSIONAL PRACTICE

¶1901 Overview—Level II Planning: Asset Protection for the Operating Business and Professional Practice

.01 Offshore Trust Settled by an Existing Company

.02 Holding Assets in a Limited Partnership or Limited Liability Company

.03 Divisive Reorganization to Segregate Business Components

.04 “Equity Strip” to Protect Equity from a Company’s Creditors

.05 “Sale-Leaseback” of Company Assets

¶1915 Offshore Trust Settled by an Existing Company

¶1925 Holding Assets in a Limited Partnership or Limited Liability Company

¶1935 Divisive Reorganization to Segregate Business Components

¶1945 “Equity Strip” to Protect Equity from a Company’s Creditors

¶1955 “Sale-Leaseback” of Company Assets

APPENDIX—PRACTICE TOOLS

¶10,001 Overview

¶10,020 Engel Ladder of Asset Protection Tools

¶10,040 Uniform Fraudulent Conveyance Act

¶10,060 Uniform Fraudulent Transfer Act

¶10,080 Homestead Monetary Exemption Amounts Per State

¶10,100 Articles 80 and 81 of the Swiss Insurance Act

¶10,120 Partnership Agreement–Assignment vs. Substituted Partner

¶10,140 General Partner Interest Owned by a Corporation

¶10,160 Dual Family Limited Partnership Structures

¶10,180 Dual Limited Liability Companies

¶10,200 Sample Alaska Perpetual Family Trust

¶10,220 Model Foreign Integrated Estate Planning Structure Including Domestic Family Limited Partnership

¶10,260 Model Foreign Integrated Estate Planning Trust Structure

¶10,280 Model Foreign Integrated Estate Planning Trust Combined with Estate Planning

¶10,300 Multiple Structures

¶10,320 Allocation of Assets Between the Family Limited Partnership and the Sample Foreign Integrated Estate Planning Trust

¶10,340 No General Partnerships Held by Model Foreign Integrated Estate Planning Trust

¶10,360 Model Foreign Integrated Estate Planning Trust—High Degree of Protection

¶10,380 Asset Protection Control/Benefit Scale

¶10,420 Protective Measures and the Sample Foreign Integrated Estate Planning Trust Structure

¶10,440 Sample Anti-Duress Clause

¶10,460 Sample Fee Agreement

¶10,480 Affidavit of Solvency

¶10,500 Sample Language to Remove Trustees upon Certain Contingencies

¶10,520 Sample Inter Vivos and Testamentary Powers of Appointment

¶10,540 Divorce Clause

¶10,560 International Trusts Act 1984, as Amended

¶10,600 ERISA Pension Plan Flowchart

¶10,620 Non-ERISA Plan Flowchart

¶10,640 Life Insurance Exemption Amounts Per State

¶10,660 Sample Spendthrift Clause

¶10,680 Transcript of 1995 Contempt Proceedings

¶10,700 Comparison of Selected Domestic Asset Protection Statutes

¶10,720 Charging Order Chart by State

¶10,740 Sample Charging Order Language

¶10,760 Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

¶10,780 Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner

¶10,800 Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations

¶10,880 Case Study: Fraudulent Transfer Law and the “Threshold Issues”

¶10,900 Present, Subsequent, and Future Potential Creditor Timeline

¶10,920 Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships

¶10,940 Suspicious Activity Reports

¶10,960 Request for Service Abroad of Judicial or Extrajudicial Documents

¶10,980 Inaccurate Affidavit re: Letters Rogatory

¶11,000 Sample Mareva Order

¶11,020 Sample Privilege Log

¶11,040 FinCEN Form 114

FINDING LISTS

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Back Cover