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Planning and Defending Domestic Asset-Protection Trusts

Product Code - TMAU40
Speaker(s): Mary B. Hickok, Richard W. Nenno, Jeffrey C. Wolken 
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As society became increasingly litigious late in the Twentieth Century, Americans became interested in the asset-protection trust (“APT”)—a trust in which the trustor may retain some potential benefits that cannot be reached by creditors. Until 1997, this interest was satisfied only by trusts created in foreign jurisdictions. A client now may create a domestic APT, i.e., an irrevocable self-settled spendthrift trust that generally is effective against claims by creditors in Alaska, Delaware, Nevada, New Hampshire, Rhode Island, South Dakota, Tennessee, Utah, and Wyoming. Domestic APTs warrant consideration along with other strategies for protecting assets, particularly because the effectiveness of some long-standing asset-protection techniques (e.g., the tenancy by the entirety, the foreign APT) has been called into question.

This webinar explores tax and nontax aspects of the domestic APT and how this vehicle may meet a client’s planning needs.

Presentation Objectives:
This 60-90 minute Webinar will describe:
• The numerous uses and benefits of domestic APTs
• How a client may avoid engaging in a fraudulent transfer when creating a domestic APT
• How to counter creditor attacks on domestic APTs involving jurisdiction, choice of law, full faith and credit, bankruptcy, and other issues
• How attorneys may avoid ethical concerns and liability for counseling or not counseling clients on domestic APTs
• How a domestic APT will be treated for federal income- and transfer-tax purposes
• Attributes of the various domestic APT statutes
• Differences among the Alaska, Delaware, and Nevada acts
• Differences between foreign and domestic APTs
• How to design, establish, and administer a domestic APT.

Upon completion of this program, participants will be able to:
• Determine when a domestic APT might be right for a client
• Structure a domestic APT so that it will work
• Assess the federal tax implications of a particular domestic APT
• Decide which state’s law is best for a client
• Implement the trust even if he or she practices in a state that does not honor domestic APTs

Mary B. Hickok, Richard W. Nenno, Jeffrey C. Wolken 

Mary Hickok is responsible for developing and maintaining comprehensive estate plans for prominent individuals and families throughout the United States and aboad.

Mary has over two decades of experience as a practicing attorney.  Prior to joining Wilmington Trust in 1988, she specialized in all aspects of estate planning and personal trust law for a firm in Delaware. 

Mary is a member of the Delaware, Pennsylvania, and American Bar Associations.  She is also a member of the Board of Directors for the Delaware Community Foundation, the Estate Planning Council of Delaware, and served as the Chair of the Estates and Trusts Section of the Delaware Bar Association for the 1999-2000 term.

Richard Nenno is a Managing Director and Trust Counsel at Wilmington Trust Company. He is admitted to the bars of Delaware and Pennsylvania, is a cum laude graduate of Princeton University, and received his J.D. degree from Harvard Law School.

Dick is recognized as a national speaker and published authority on estate planning issues. He has spoken at the University of Miami Institute on Estate Planning, the ALI-ABA Planning Techniques for Large Estates Conference, the Notre Dame Tax and Estate Planning Institute, and many other conferences. He is a member of the Delaware State Bar Association (Past Chair: Estates and Trusts Section) and the American Bar Association, Section of Real Property, Trust & Estate Law (Chair: Non-Tax Estate Planning Considerations Group) and Section of Taxation.

He is the author or co-author of numerous articles, including Delaware Trusts 2010, Asset Protection: Domestic & Int’l Law & Tactics Chap. 14A (2010); Terrors of the Deep: Tax Dangers When Exercising Powers Over Trusts—The GST Regulations and the Delaware Tax Trap, 34 Tax Mgmt. Est., Gifts & Tr. J. 76 (Jan. 8, 2009); Planning to Minimize or Avoid State Income Tax on Trusts, 34 ACTEC J. 131 (Winter 2008).

Jeff is responsible for developing trust planning strategies for wealthy individuals and families throughout the United States and abroad. He works closely with his clients’ legal, tax, and investment advisors to construct and implement appropriate trust structures that take advantage of the state of Delaware’s unique trust and tax laws.

Prior to joining Wilmington Trust in 2005, Jeff spent seven years in private legal practice as a member of the Estates and Trusts Practice Group of the Philadelphia-headquartered law firm of Montgomery, McCracken, Walker & Rhoads, LLP.

Jeff is admitted to the practice of law in Delaware, Pennsylvania, and New Jersey. He is a member of the Estates and Trusts Section of the Delaware State Bar Association, the Probate and Trust Law Section of the Philadelphia Bar Association, and the Estate Planning Council of Delaware.