Is it all it’s cracked up to be? There are numerous opinions on the viability of both domestic and foreign asset protection vehicles. Foreign Asset Protection Trusts (FAPTs) were all the rage before the Anderson, and more recently, the Eulich decisions. In both cases the “Impossibility Defense” was struck down in US court and in both cases both defendants were tossed into jail for contempt.
Reality is that an asset protection schematic can be integrated into a well conceived estate plan. The keys are to explore, from a bottom up perspective, the various vehicles that offer shelter to a client’s assets, taking into account the level of risk to a legal challenge.
From self-settled domestic trusts, to intricate offshore planning, the client needs to be advised of not only the potential protection the strategy affords to a client’s wealth, but more importantly the level of risk that the fabric might be unwound by US Courts.
Asset protection is alive and well. It’s just time for the promoters of such planning techniques to turn down the hype and fully disclose the risks before a client steps into the breach.