Offshore Trusts - the impact of UTC
Offshore 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 Offshore Trusts 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 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 Offshore Trusts are probably your best solution, Consider these factors:
1) Distance - Offshore Trusts physically makes it inconvenient for others to take action
2) Jurisdiction - with Offshore Trusts your assets are protected outside the jurisdiction of
the UTC courts.
3) Avoids Public Probate Process - with Offshore Trusts you avoid the public and lengthy
probate process that would otherwise be required by your last will and testament
4) Offshore Trusts 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
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
Offshore Trusts. If you have already set up a trust in a UTC State, its even more paramount.