Asset Protection Trusts: Fundamentals and New Approaches
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Understand key strategies for approaching domestic and offshore asset protection trusts for your clients.
This topic will focus on the uses, benefits, requirements and differences among the various Asset Protection Trusts (APTs) jurisdictions permitted and the reasons why one law may be preferred over another. There will also be a discussion of the most recent applications involving trusts for protection and other uses. Examples include the use of an APT as a completed gift trust under the current income, gift, estate and generation-skipping transfer tax rules, ILITs with broader flexibility and benefits, and beneficiary favored trusts. These evolving strategies provide better-received options for your clients. Lastly, domestic trusts will be compared to offshore trusts.
Speaker: Edward D. Brown
Course Content:
Domestic Asset Protection Trust (DAPTs) |
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- States With DAPTs
- Alaska, Colorado, Delaware, Hawaii, Missouri, Nevada, New Hampshire, Oklahoma, South Dakota, Tennessee, Utah, Wyoming, Mississippi, Ohio, Rhode Island, West Virginia and Virginia
- Benefits of APTs
- Protect Assets
- Limited Power to Appoint
- Veto Distributions
- Settlor May Be Able to Terminate (If Substantial Adverse Interest Party Agrees)
- May Restrict Claims Against Parties Drafting, Funding and/or Advising
- Nuances of DAPTs
- InState Trustee
- Settlor Is Not Trustee
- Trustee Can Maintain Records and Prepare Taxes
- Some Administration in State
- Some Assets in State
- Irrevocable
- No Required Distributions to Settlor
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Use of APT as a Completed Gift Trust or ILIT |
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- Must Use Right Jurisdiction
- Statutory Exceptions
- Statute of Limitations
- Use up to Maximum Gift Tax Exemption Amount ($5,450,000 in 2016)
- Income Tax
- Estate Tax Exclusion
- Asset Protection
- Settlor Retains Beneficial Interest in Trust Assets
- Need Independent Trustee
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Third-Party Trusts (Beneficiary Favored Trusts) |
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- Prevention of Taxes
- Protection of Assets
- Power Over Assets
- Profit Retention
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Selected Offshore Asset Protection Trust Legislation |
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- Application of Cook Islands Protective Laws
- Nevis
- Belize
- Advantages of Offshore APTs Over DAPTs
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