On June 19, 2012, the Superior Court for the State of California for the County of Los Angeles sustained our motion to dismiss a lawsuit by Wilmington Capital LLC against The Big Whale Trust (a 541 Trust™ created by McCullough Sparks).
The grantor had funded the trust with cash and real estate...
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In 2009, our client, Todd H., transferred his home and some cash to a 541 Trust™ at a time when they were solvent and had no foreseeable liability problems. Todd's wife was the trustee, and his wife and children were the beneficiaries. In 2010, Todd's business went downhill along with the rest of...
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One way to attack an irrevocable trust is to prove that the trust is the alter ego of the grantor because the trust is operated in a manner so that it has no separate existence from the grantor. Some courts describe this as the grantor "exercising such control that the...
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For many years, asset protection planners have believed and promoted the idea that an out-of-state resident could take advantage of the strong charging order laws in another state by filing their LLC in that state.
Recent cases show that this does not work.
In American Institutional Partners, LLC v. Fairstar Resources, Ltd., 2011 WL 1230074...
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A self-settled trust is a trust in which the grantor is also included as a beneficiary. Historically, all fifty states did not allow asset protection for a self-settled trust.
In recent years, several states have passed laws allowing asset protection for a self-settled trust. These states include Alaska, Nevada, Delaware,...
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I had a client named Bill who was a wealthy physician. In 2003, he created a 541 Trust™ for his wife Jenny and their four children.
He put $2,000,000 into the 541 Trust™ where it was invested in income producing real estate. In 2005, Bill died. In 2007, Jenny married a successful real estate developer named Paul. Paul needed...
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Doctors have several unique characteristics that require specialized asset protection planning. First, doctors cannot take advantage of the corporate shield that protects other business owners from the liabilities of their business. In all fifty states, doctors are personally liable for malpractice claims regardless of whether their practice is operated within...
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This is a summary of important findings from recent asset protection cases:
1. In re Baldwin, 593 F.3d 1155 (10th Cir Ct. App. 2010). Bankruptcy trustee can avoid restrictions imposed by state law charging order statutes if a partnership agreement is not an executory contract. Also see In re Ehmann 2005...
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In the recent case, Miller v. Kresser, 2010 Fla. App Lexis 6152 (Fla. 4th DCA 2010), a Florida Appeals court overturned the ruling of a lower court which allowed a creditor to reach the assets of a trust.
The lower court allowed the creditor to reach the assets of the trust...
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As a sequel to my previous blog entry, I wanted to provide a report of our recent trip to Death Hollow.
The first day entails a 13 mile hike in soft desert sand without any water. Last time we did this hike we almost died of dehydration. This time we left...
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