COVER YOUR ASSETS
ASSET PROTECTION TRUSTS AND THE VITAL
IMPORTANCE OF TRUST JURISDICTION

D AV I D WA R R E N , J D
REED H...
FRAUD ENGAGEMENT
FROM A TO Z

S A M U E L

B O W E R C R A F T ,

M S I S ,

C I S A

&
D A V I D
C P A ,

H A M M A R B E...
COVER YOUR ASSETS
ASSET PROTECTION TRUSTS AND THE VITAL
IMPORTANCE OF TRUST JURISDICTION

D AV I D WA R R E N , J D
REED H...
ABOUT MCKONLY & ASBURY, LLP
• Audit, Tax and Risk Management Firm
• Regional presence in Pennsylvania
• Special capabiliti...
INTRODUCTIONS
DAVID WARREN
• President and CEO
• Bridgeford Trust Company
• Law Background
AGENDA
• Overview of the role of a trust company
• Pros and cons of situs (location/jurisdiction of the trust)
• Explanati...
WHAT IS A TRUST COMPANY?
• State chartered entity empowered to hold and manage assets
(including Investment Assets) in tru...
WHO IS BRIDGEFORD TRUST COMPANY?
• Independent South Dakota Chartered Trust Company based in Pennsylvania.
• Powerful team...
WHY SOUTH DAKOTA FOR TRUST SITUS?
• Routinely Ranked as among the Best United States Trust Jurisdiction
• Trust and Estate...
WHAT IS A DOMESTIC ASSET PROTECTION TRUST?
• Self Settled Trust that protects assets from creditors (including future
spou...
ASSET PROTECTION STATES
14 States have passed Asset Protection Statutes
South Dakota, Nevada, Alaska, and Delaware are
con...
FACTORS THAT DETERMINE THE BEST ASSET
PROTECTION STATES
• Taxation of Trust Assets
• Fraudulent Conveyance/Stature of Limi...
PROTECTING ASSETS BROUGHT INTO MARRIAGE
• In the absence of proper premarital planning, a spouse
in a dissolving marriage ...
ADVANTAGES OF DOMESTIC ASSET PROTECTION
TRUSTS OVER PRENUPTIAL AGREEMENTS
• No Disclosure Requirement
• No Timing Requirem...
ASSET PROTECTION, TRUST JURISDICTION AND
MALPRACTICE
Is their a legal duty to discuss asset protection and alternative tru...
RECAP
• Trust jurisdiction matters and is a vitally important factor to consider in the wealth
planning process.
• Domesti...
THANK YOU
If you have questions, please contact us:
David Warren
• dwarren@bridgefordtrust.com

Reed Horanburg
• rhoranbur...
FRAUD ENGAGEMENT
FROM A TO Z

S A M U E L

B O W E R C R A F T ,

M S I S ,

C I S A

&
D A V I D
C P A ,

H A M M A R B E...
McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)
McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)
McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)
McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)
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McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)

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During this webinar David Warren (President and CEO) with Bridgeford Trust Company and Reed Horanburg (Senior Consultant) with McKonly & Asbury consider asset protection in the context of trust planning, how to best utilize asset protection trusts, and examine the importance of selecting the proper trust jurisdiction for optimal protection and flexibility.

Check out our Upcoming Events page for news and updates on our future seminars and webinars at http://www.macpas.com/events/.

View a full recap of this webinar at http://www.macpas.com/webinar-cover-your-assets-asset-protection-trusts-and-the-vital-importance-of-trust-jurisdiction/

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Transcript of "McKonly & Asbury Webinar - Cover Your Assets (Asset Protection Trusts and the Vital Importance of Trust Jurisdiction)"

  1. 1. COVER YOUR ASSETS ASSET PROTECTION TRUSTS AND THE VITAL IMPORTANCE OF TRUST JURISDICTION D AV I D WA R R E N , J D REED HORANBURG
  2. 2. FRAUD ENGAGEMENT FROM A TO Z S A M U E L B O W E R C R A F T , M S I S , C I S A & D A V I D C P A , H A M M A R B E R G , C F E , C I S S P , M C S E , W X Y Z
  3. 3. COVER YOUR ASSETS ASSET PROTECTION TRUSTS AND THE VITAL IMPORTANCE OF TRUST JURISDICTION D AV I D WA R R E N , J D REED HORANBURG
  4. 4. ABOUT MCKONLY & ASBURY, LLP • Audit, Tax and Risk Management Firm • Regional presence in Pennsylvania • Special capabilities Private Client Services (wealth and legacy planning, including asset protection ) • Best Places to Work in PA (9 times) and Best Accounting Firm (3 times)
  5. 5. INTRODUCTIONS DAVID WARREN • President and CEO • Bridgeford Trust Company • Law Background
  6. 6. AGENDA • Overview of the role of a trust company • Pros and cons of situs (location/jurisdiction of the trust) • Explanation and application of domestic asset protection trusts • Liability and malpractice? • Recap
  7. 7. WHAT IS A TRUST COMPANY? • State chartered entity empowered to hold and manage assets (including Investment Assets) in trust. • Not a Broker or Register Investment Advisor. (Regulated Differently— Important) • Fiduciary • Functions and Duties (When would you need one?) • Corporate v. Independent Trustee
  8. 8. WHO IS BRIDGEFORD TRUST COMPANY? • Independent South Dakota Chartered Trust Company based in Pennsylvania. • Powerful team of experienced trust, legal, and accounting professionals providing exceptional client service across the country from fully functional and staffed offices in South Dakota and Pennsylvania. • Ability and desire to work with Non-Traditional Trust Assets such as Real Estate, Closely Held Stock, and Insurance. • Collaborative approach working closely with advisor team to prepare and seamlessly execute wealth and trust planning. • World Class trust accounting and back office infrastructure.
  9. 9. WHY SOUTH DAKOTA FOR TRUST SITUS? • Routinely Ranked as among the Best United States Trust Jurisdiction • Trust and Estates Magazine rated South Dakota as the overall best U.S. trust jurisdiction in all categories in 2004, 2007, 2010 and 2012. • Industry Leading and oldest Domestic Asset Protection Provisions • South Dakota Asset Protection Trust provides powerful layer of protection for creditors and legal claims with an industry leading two year fraudulent conveyance “look back” statute. (Delaware stature is four years). • No State Taxation on Trust Assets • Utilizing South Dakota trust law can result tax savings, reducing the over all costs of maintaining trust accounts. • Best Trust Privacy Statute in the U.S. • Unlike Delaware, there is total seal on all South Dakota Trusts forever. Therefore, the existence of the trust, trust provisions, and asset allocation is unavailable to the general public. • Local Trust Administration/Relationship Management • All accounts will be administered by a local relationship management team that will routinely travel to meet with clients across the country.
  10. 10. WHAT IS A DOMESTIC ASSET PROTECTION TRUST? • Self Settled Trust that protects assets from creditors (including future spouse) • Strategy that legally shields assets from third party liability (future spouse) while permitting settlors to retain some control over trust assets AND enjoy a discretionary beneficiary interest during their life time • Pennsylvania does NOT have an Asset Protection Trust Statute
  11. 11. ASSET PROTECTION STATES 14 States have passed Asset Protection Statutes South Dakota, Nevada, Alaska, and Delaware are consistently recognized as having the most robust and powerful Asset Protection Statutes in the nation * *SEE DOMESTIC ASSET PROTECTION TRUSTS: WHICH JURISDICTIONS ARE THE MOST EFFECTIVE TO SET UP THIS POWERFUL TOOL? MARK METRIC & DANIEL G. WORTHINGTON, TRUST AND ESTATES MAGAZINE, JANUARY 2013
  12. 12. FACTORS THAT DETERMINE THE BEST ASSET PROTECTION STATES • Taxation of Trust Assets • Fraudulent Conveyance/Stature of Limitations • Spouse/Child Support Exception • Privacy Provisions
  13. 13. PROTECTING ASSETS BROUGHT INTO MARRIAGE • In the absence of proper premarital planning, a spouse in a dissolving marriage may be entitled to equitable distribution of property brought to the marriage • Use of Prenuptial Agreements presents many personal and legal issues that often deter couples from using them • Many practitioners have turned to alternatives to protecting assets such as Domestic Asset Protection Trusts
  14. 14. ADVANTAGES OF DOMESTIC ASSET PROTECTION TRUSTS OVER PRENUPTIAL AGREEMENTS • No Disclosure Requirement • No Timing Requirement • No executed Documents, Contracts, or need for acquiescence from the intended spouse • Domestic Asset Protection Trusts avoid uncomfortable and potentially confrontational conversations • Reduces chances of a successful attack resulting in the equitable distribution of property brought to the marriage
  15. 15. ASSET PROTECTION, TRUST JURISDICTION AND MALPRACTICE Is their a legal duty to discuss asset protection and alternative trust jurisdiction with high risk clients (example: doctors and business owners)? • Recent law review articles and lower court decisions suggest that a legal duty may exist and, therefore, failure to discuss these issues in the planning process could result in a malpractice claim. * • It has also been suggested that failure to select the proper domestic asset protection state stature in the planning process could also lead to a malpractice claim. * *See Charles Epps Ipock, Case Note, How an Obscure Tennessee Opinion Uncovers the Veil of Legal Malpractice Between Asset-Protection Trusts and the Uniform Trust Code, 3 ST. MARY’S J. LEGAL MAL. & ETHICS *1 (2013) http://www.stmaryslawjournal.com/pdfs/Ipock_final.pdf
  16. 16. RECAP • Trust jurisdiction matters and is a vitally important factor to consider in the wealth planning process. • Domestic Asset Protection Trusts offer a compelling tool to protect assets from creditors, law suits, and spousal claims. • Not all Domestic Asset Protection Statutes are created equally or offer the same benefits. • Domestic Asset Protection Trusts offer are a powerful to be used to protect assets in divorce proceeding in conjunction with or in lieu of prenuptial agreements. • A planner may have a legal duty to discuss alternative trust jurisdictions and asset protection with clients in the wealth planning process.
  17. 17. THANK YOU If you have questions, please contact us: David Warren • dwarren@bridgefordtrust.com Reed Horanburg • rhoranburg@macpas.com
  18. 18. FRAUD ENGAGEMENT FROM A TO Z S A M U E L B O W E R C R A F T , M S I S , C I S A & D A V I D C P A , H A M M A R B E R G , C F E , C I S S P , M C S E , W X Y Z

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