By Steven J. Oshins, Esq., AEP (Distinguished) In Waldron v. Huber (In re Huber), Waldron v. Huber (In re Huber), Case No. 11-41013 (Bankr. W.D. Wash. Nov. 25, 2013), the court (in dicta) ruled that the law of the residency of the settlor of a Domestic Asset Protection Trust (“DAPT”) applies rather than the law chosen in the trust agreement for purposes of determining whether a DAPT is protected from the creditors of the settlor. [Dicta is a portion of the judge’s opinion that is not essential to the resolution of the case. Huber was a bankruptcy and fraudulent transfer…
Advisors Who Don’t Use Out-of-State Trusts: What Their Clients Get
By Steven J. Oshins, Esq., AEP (Distinguished) Most advisors stick to using their own home state’s trust laws and fail to take advantage of other states’ more favorable laws. This would be like forming business entities in your home state rather than going to traditional best states such as Nevada or Delaware. This analogy should put in perspective how much is lost for the client by failing to maximize the use of more favorable trust laws. What This Means for the Clients The clients of advisors who fail to use out-of-state trusts often can’t modify preexisting irrevocable trusts without going…
Three-Year-Old Tiffany Oshins Interviews Daddy About Domestic Asset Protection Trusts
By Tiffany A. Oshins and Steven J. Oshins, Esq., AEP (Distinguished) Three-year-old student Tiffany A. Oshins (“Tiffany”) recently sat down with her father, estate planning attorney Steve Oshins (“Daddy”). Tiffany interviewed Daddy about asset protection planning and Domestic Asset Protection Trusts. Below are highlights from the interview. [Daddy helped Tiffany with a lot of her spelling.] Tiffany: I overhear you talking about asset protection planning all the time. How do you start this conversation with prospective clients? Daddy: Many of them come to me specifically for asset protection planning. So the conversation is simple with them because they already have that…
Why Do Nevada and Delaware Get Most of the ING Trust Business?
By Steven J. Oshins, Esq., AEP (Distinguished) We keep hearing about NING Trusts (Nevada) and DING Trusts (Delaware). Occasionally, but much less often, we hear about WING Trusts (Wyoming) too. Nevada and Delaware clearly get the vast majority of the ING Trust business. Wyoming seems to be the next jurisdiction to take a reasonably good chunk of the pie. Is this because these jurisdictions actually have the best laws? Or is it simply a function of good marketing? The words “NING”, “DING” and “WING” just roll off the tip of your tongue, eh? Let’s take a close look at ING…
Poll Results: Which Is the Best Trust Jurisdiction?
By Steven J. Oshins, Esq., AEP (Distinguished) In a one-week LinkedIn poll conducted in March of 2023, I asked thousands of people primarily made up of estate planners and financial planners: “Which is the best trust jurisdiction?” Among 5,104 “impressions” (number of times users see the poll question), there were 123 total votes. The permitted responses were limited to Nevada and South Dakota simply because these are so clearly the two best trust jurisdictions and therefore there was no reason to dilute the votes by including additional options. Results The results were as follows: *Nevada …
9th Annual Non-Grantor Trust State Income Tax Chart Released!
By Steven J. Oshins, Esq., AEP (Distinguished) Different states have different rules as to what creates a “resident trust” that is subject to taxation in that state. States may tax a trust based on the residency of the settlor or testator, based on whether there is a resident trustee or beneficiary or whether there is administration in that state, or for a combination of these factors and/or other similar factors. So it isn’t as easy as simply situsing a trust in a state with no state income tax. You have to look at the state taxing statutes that may apply….
When the Prospective Client Says, “How Much Does It Cost?”
By Steven J. Oshins, Esq., AEP (Distinguished) The cost of the legal work will at some point become part of the up-front discussion with a prospective client. Many such prospective clients hear how much the legal fees are and roll their eyes as though they are being suckered. I’ve had many conversations go something like this: Prospective Client: How much does it cost? Attorney: We charge $30,000. Prospective Client: That much? I was quoted $5,000 by another attorney. Attorney: That was to prepare a Revocable Trust. I’m trying to do advanced estate planning for you which should save your family…
Heckerling 2023 Reports from the ABA
The Phillip E. Heckerling Institute on Estate Planning is the nation’s premier conference for estate planning professionals, offering unparalleled educational and professional development opportunities for all members of the estate planning team. The 2023 Heckerling Institute was held in-person in Orlando on January 9-13 and marked the conference’s 57th year. Over the course of the conference’s five days, numerous timely topics of interest to estate planners of all designations—including, but not limited to, attorneys, trust officers, accountants, charitable giving professionals, elder law specialists, wealth management professionals, and nonprofit advisors. As they have done for many years, the American Bar Association…
The HUGE Problem with DAPT Jurisdictions that Require Affidavits of Solvency
By Steven J. Oshins, Esq., AEP (Distinguished) At the time of this writing, there are twenty states that have enacted Domestic Asset Protection Trust (“DAPT”) statutes. However, not all of these states have superior laws. This article describes just one of many differences among the various states’ DAPT statutes. Specifically, it explains the Affidavit of Solvency differences among these states. What is an Affidavit of Solvency? An Affidavit of Solvency is a sworn statement that indicates that the transfer of assets an individual is about to make will not render that individual or entity bankrupt or insolvent. Attorneys generally have…
The “L” in SLAT: “Lifetime” or “Limited”?
By Steven J. Oshins, Esq., AEP (Distinguished) Some articles call it a Spousal Lifetime Access Trust, while others call it a Spousal Limited Access Trust. Which is it? It can’t be both! It depends upon how it’s drafted. Spousal “Limited” Access Trust When I draft a SLAT, it’s a Spousal Lifetime Access Trust because distributions aren’t “limited”. Why would the draftsman want to limit distributions? One of the objectives is for the settlor to be able to indirectly live out of the trust via distributions to the settlor’s spouse who can then share them with the settlor. Drafting in substantial…