Asset Protection Trusts (APT) are designed to protect assets from lawsuits and ex-spouses and have existed for many years. During my trips to Switzerland in the 1990s, I studied them closely and also became convinced that there are more crooked financial advisors pushing these trusts than any other field in financial planning. Normally, I urge clients to avoid APT for a host of reasons -- but particularly because you must give up title to your own assets permanently, in order to create the trust.
However, there has been a recent court case, which allowed an individual to create such a trust in the Cook Islands after litigation had begun but before damages were assessed against that individual. He got to keep the money in that trust, and the creditors got nothing.
Personally, I think this is unconscionable and hope it will reversed on appeal. In the meantime, I expect these same old crooked financial advisors to crawl out from under their rocks and start pushing APTs like cotton candy.
Beware!
However, there has been a recent court case, which allowed an individual to create such a trust in the Cook Islands after litigation had begun but before damages were assessed against that individual. He got to keep the money in that trust, and the creditors got nothing.
Personally, I think this is unconscionable and hope it will reversed on appeal. In the meantime, I expect these same old crooked financial advisors to crawl out from under their rocks and start pushing APTs like cotton candy.
Beware!
