Our Uniform Law Commission (ULC) unanimously adopted (this week) the Uniform Voidable Transactions Act.
This newsletter discusses contempt of court, and a new case that reaffirms the right to establish offshore trusts without fear of incarceration.
We are often asked by potential clients, “Can’t I just transfer my assets to my spouse to protect them?” We have always recommended against that “strategy” for a number of reasons, not the least of which, we tell our clients: “What if she/he decides to divorce you? You could lose it all forever.” Another significant reason is that the transfer could be easily “undone” by a court if a fraudulent transfer is found to have occurred. Thus, no asset protection.
Ohio has joined the growing list of states which have enacted asset protection trust legislation. Chapter 5816, Revised Code of Ohio, enacts the Ohio Legacy Trust Act, which, on and after March 27, 2013, permits the creation of self-settled spendthrift trusts called “Legacy Trusts”.
A 2012 Illinois Supreme Court case, Rush University Medical Center v. Sessions, has been touted as proof that asset protection trusts, especially offshore trusts, do not work. In this issue we will clarify and enlighten our readers as to why that particular offshore trust failed to protect assets, and we will point out what could and should have been done differently so that the protective planning would have worked as intended.
It is often said that once a person has been sued nothing can be done to protect assets. This is usually true. The knowledgeable asset protection professional will, however, be able to recognize the few exceptions to that rule. The ability to recognize and utilize the exceptions will depend upon a thorough understanding of the relevant fraudulent transfer law.
Many individuals attempt to implement asset protection on their own. Among the “do-it-yourself” methods commonly utilized is titling and re-titling assets among a spouse, children and others (friends & family members). Instead of accomplishing the desired protection, these “strategies” often expose the transferred asset to additional creditors, cause family conflicts, and raise gift and estate tax issues.
The Jamie Solow contempt incarceration case has caused a lot of people to write a lot of articles and offer a lot of opinions – most of which are completely inaccurate. The author, Howard D. Rosen, is one of Mrs. Solow’s attorneys, attended court hearings, testified, and can state with accuracy what actually transpired in this case.
On August 19th the U.S. Internal Revenue Service announced that the Swiss bank, UBS AG, the United States, and Switzerland had reached an agreement under which the U.S. would file a request under the U.S. – Swiss tax treaty to obtain certain data regarding U.S. taxpayers (about 4,450 accounts)