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10 Reasons I Can Give You Better Asset Protection:

1. A Better Concept.  The best way to protect assets is to create a good old-fashioned irrevocable trust that includes a special power of appointment (I call this a "Special Power of Appointment Trust").  Attached is a technical article, scheduled for publication in Estate Planning magazine, explaining why the Special Power of Appointment Trust is so much safer, more reliable, more confidential, and less expensive than all other asset protection trusts.

Building a Better Asset Protection Trust/Estate Planning Magazine

 

2. A Better Legal Foundation.  All other asset protection trusts are based on the concept of a self-settled trust (a trust in which the creator of the trust is also included as a potential beneficiary).  The asset protection provided by a self-settled trust has no case law to support it.  At least two bankruptcy courts have refused to uphold the asset protection provided by a self-settled trust because this would violate the policies of the bankruptcy system.  In contrast, my Special Power of Appointment Trust is based on laws that have been consistently upheld for centuries in all fifty states and in the US bankruptcy courts.  To review the case law supporting my Special Power of Appointment Trust, click here: Law-and-Precedent-Supporting-the-Special-Power-of-Appointment-Trust


3.
Better than a Family Limited Partnership or an Offshore Trust.  My Special Power of Appointment Trust is better than a Family Limited Partnership or an Offshore Trust for many reasons, including the fact that is safer, more confidential, less expensive, and much less of a hassle to create and maintain.  To read 10 reasons the SPA Trust is better than an FLP, and 10 reasons it is better than an offshore trust, click here: http://www.assetprotectionstrategies.net

 
4. Better Convenience and Control.  If you create a Special Power of Appointment Trust, you will be the only person with knowledge, access, or control over your assets.  Your Special Power of Appointment Trust will own an LLC which holds all the assets.  As manager of the LLC, you have direct access and control over your assets and you can invest them without limitation.  The “special power of appointment” is a power that allows the assets to be appointed to you at any time even, though you are not a beneficiary.

 

5. Better Confidentiality.  If you are sued, bankrupt, divorced, or subject to scrutiny by a government agency, you will be asked to disclose all of your assets and any trust of which you are a beneficiary.  If you had a self-settled asset protection trust, you would have to answer that you are a beneficiary of the trust and this will open the trust up to examination and attack.  If you have a Special Power of Appointment Trust, you will correctly answer that you are not a beneficiary of any trust.  You have no legal or beneficial ownership in the assets of your Special Power of Appointment Trust and they cannot be included on a disclosure of your assets.

 

6. Better Experience.  I am an asset protection attorney, a tax attorney, and a law school professor.  I teach law students how to draft wills and trusts.  Unlike most asset protection companies found on the internet, I am qualified to give you legal advice and tax advice and I can customize a plan to fit your specific needs and wants.  I will not sell you a standardized set of documents, I will personally design your documents to fit your situation.  I have created hundreds of Special Power of Appointment Trusts over the past decade.  Many of these have been tested in litigation, in bankruptcy, or in administrative proceedings, and all of them have proven to be completely unassailable.  In fact, there has never been a case anywhere in this country where a creditor has pierced a trust because the debtor was a permissible appointee under a special power of appointment.

 

7. Better Flexibility.  Unlike a self-settled asset protection trust which is only accepted in a few progressive jurisdictions, the Special Power of Appointment Trust is equally effective in all fifty states and all foreign jurisdictions regardless of where you are from or where the litigation takes place.  Your Special Power of Appointment Trust can be located in any jurisdiction that you prefer, and it can be moved at any time.  In addition, the special power of appointment is a provision in your trust that allows the conditions, beneficiaries, or terms of the trust to be changed at any time, but only with your consent.  This makes the Special Power of Appointment Trust much more flexible than any other asset protection trust.

 

8. Better Service.  I offer a free initial consultation to anyone.  We can discuss your situation and brainstorm ideas to come up with the best plan for you.  I will do all your work myself; I will not delegate your case to others.  Once you give me the go ahead, I can complete your plan within days, not months.  I will provide unlimited assistance in helping you transfer your assets and title them appropriately.  I will work with your local attorneys to ensure that your plan is in harmony with local laws, and I will coordinate with your accountant to ensure that your taxes are reported correctly.

 

9. Better Price.  I will let you know the exact total cost of your plan in advance, so you will never receive a bill you did not expect.  The cost will depend on the complexity of your situation, and the jurisdictions that you choose for your trust and your LLC.  I am confident that I can give you a better price for any comparable service.

 

10. Better Support.  After your plan is complete, you may have tax questions, you may need help in transferring additional assets, you may want to make changes due to family situations, you may want help setting up new investment accounts, and you may need support to defend against a creditor attack.  I will personally take your calls and provide the support you need to ensure that your asset protection plan is a continuing source of security and peace of mind.

 

Consider the following example:

 

You create a Special Power of Appointment Trust with the following features:

1.                  You are the “settlor” (or creator) of the trust.

2.                  You appoint your spouse, friend or relative as the “trustee” of the trust.  If you wish to have the trust located in a foreign jurisdiction, you will also need to name a trustee in that jurisdiction.  The trustee signs the trust document and has authority to sign for the trust.  The trustee has no knowledge, access or control over the assets because the assets are in an LLC that is owned by the trust.  The trustee has no risk of personal liability and they can resign at any time.

3.                  You name your spouse, children, or others as the “beneficiaries” of the trust.  Assets can be distributed to the beneficiaries from time to time, but only with your consent.  After your death, the trust will be held for the beneficiaries according to your wishes as outlined in the trust document.

4.                  You appoint some combination of trusted friends, relatives or advisors as the “donees” of a special power of appointment.  This gives the donees power to appoint the assets of the trust to any person or entity, including you, but not including the donees or their creditors.  In order to be sure that the donees do not abuse this power, you provide that the power can only be exercised with your consent.

5.                  You appoint someone as your trust protector.  The trust protector has power (with your consent) to change the trustee, the donees, or the location of the trust, in order to ensure that the trust fulfills your objectives.

6.                  You name yourself as the initial manager of the LLC.  This gives you direct control over the assets.  You can invest the assets without limitation and without the consent or knowledge of any other person.

7.                  You design the trust so it is “incomplete” for gift tax purposes, allowing you to transfer unlimited amounts to the trust at any time without incurring a gift tax.

8.                  You design the trust so it is a “grantor trust” for income tax purposes and you design the LLC so it is a disregarded entity for income tax purposes.  This means that you don’t have to file any extra tax returns and all income is simply reported on your personal income tax return.

9.                  You transfer assets of any kind and any value to the LLC that is owned by your Special Power of Appointment Trust.  The transfers must be done at a time and in a manner that they are not considered a fraudulent transfer.

10.              Years later, you are the object of a frivolous lawsuit by an aggressive creditor with unlimited resources.  You have no legal or beneficial ownership in the trust or the LLC.  The trust is not a public record anywhere.  The LLC is filed in a jurisdiction where the managers and members are not disclosed anywhere.  There are no tax returns on the public record for the trust or the LLC.  The entities and assets can be moved to any jurisdiction at any time.  You are not a beneficiary of the trust.  Your creditors will have no way to discover the assets of the LLC, and even if they could, they will have no legal recourse.  The donees, whom you have appointed, can transfer the assets of the trust back to you, in any amount, at any time.

 

 

My name is Lee S. McCullough, III.  I am an attorney practicing in the areas of estate planning and asset protection.  Please call me at (801) 765-0279 or send me an email at lee@lsmlaw.net with a summary of your situation, and I will send you a free proposal designed just for you.

 

Copyright © 2010 Asset Protection Attorney

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