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Offshore Asset Protection Trusts -
the impact of UTC legislation
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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.
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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.
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