Offshore Asset Protection Trusts - the impact of UTC legislation

Offshore Asset Protection Trusts now more than ever are something you want to consider particularly if you fully understand the implications of Uniform Trust Code (2005) or UTC a rather obscure initiative put forth by the National Conference of Commissioners on Uniform State Laws (NCCUSL).

Consider setting up an Offshore Asset Protection Trust particularly if you live in these States: Arkansas, Kansas, Maine, Missouri, Nebraska, New Mexico, Utah, Tennessee, New Hampshire, North Carolina, Oregon, South Carolina, Virginia, Wyoming or the District of Columbia you do not want to set up a trust account.

Why? Well considering the fact that UTC legislation severely attacks the rights of the grantor to predetermine how the assets of the trust is distributed to its beneficiaries. This is because the UTC gives beneficiaries the right to challenge the grantors wishes. Prior to this the courts could not question how the assets were redistributed unless a trustee acted unreasonably and not in good faith. Now as legislated in the above UTC States beneficiaries can bring the issue to court if he thinks the redistribution is in equable. But that is not the crux of the matter as to why an Offshore Asset Protection Trust looks better that ever.

The real threat to asset protection trusts in UTC states is the fact that in debtor-creditor law, the creditor can in effect stand in the shoes of the debtor and whereas before creditors were prohibited from breaching a trust now they can. All they have to do is put themselves in the position of the beneficiary/debtor and through that vehicle ask the courts for a redistribution.

What can one do?

Well An Offshore Asset Protection Trust is probably your best solution, Consider these factors:

1) Distance - an Offshore Asset Protection Trust physically makes it inconvenient for others to take action against you.

2) Jurisdiction - with an Offshore Asset Protection Trust your assets are protected outside the jurisdiction of the UTC courts.

3) Avoids Public Probate Process - with an Offshore Asset Protection Trust you avoid the public and lengthy probate process that would otherwise be required by your last will and testament

4) An Offshore Asset Protection Trust avoids new UTC legislation which:

a) severely erodes your trust's integrity and need for privacy;

b) limits possible beneficiaries;

c) would result in higher estate taxes

d) impacts these US states directly: Arkansas, Kansas, Maine, Missouri, Nebraska, New Mexico, Utah, Tennessee, New Hampshire, North Carolina, Oregon, South Carolina, Virginia, Wyoming or the District of Columbia.

If you live in any of the above UTC Sates reconsider setting up a trust in your state, consider getting in touch with your asset-protection attorneys and either set up a Trust out of a UTC State or consider setting an Offshore Asset Protection Trust. If you have already set up a trust in a UTC State, its even more paramount.