Under the K2 scheme, an individual resigns from their company and any salary they subsequently receive is paid to an offshore trust.
It is especially useful in private equity because a partner's original investment in a fund is often made through an offshore trust.
The Opinion does not tell us what relief was ultimately granted to the Trustee, but only that the Wife and the Offshore Trust were held liable for the fraudulent transfers.
The interesting thing about this case is that the emails discussing the hiding of assets and the offshore trust were not even directed to Husband, but he was merely copied on the emails.
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This is another way of saying that offshore trusts are good for offshore assets, but those who hope to protect purely domestic assets by conveying their title into an offshore trust quite probably accomplishes nothing.
It is folly to believe that an offshore trust will protect domestic assets there is utterly no technical legal reason to believe that such will ever be the case, except in maybe the rarest of circumstances or against unsophisticated creditors (which will almost never include a Bankruptcy Trustee).
One is to lend employees cash secured on shares held in an employee-benefit trust, usually offshore, as part of their annual bonus but deferred for three to five years.
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Last August a Senate investigating committee alleged the billionaire Samuel and Charles Wyly family used private annuity trust deals with offshore shells they controlled to avoid taxes on hundreds of millions in stock options and investment gains.
The fuss over the offshore, tax-avoiding trust held by a Treasury minister, Geoffrey Robinson (see article) does not reflect any apparent wrong-doing by Mr Robinson but rather the fact that his boss, Gordon Brown, the chancellor of the exchequer, has felt the need to attack exactly the sort of tax-avoidance schemes which his colleague has been exploiting.
This is largely driven the trust companies, both offshore and onshore, that promote FAPTs and DAPTs with little or no discussion of their downsides.
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Whatever slight nuances of Cook Islands law that some believe makes it a better trust jurisdiction than any of the other offshore debtor havens, the bad reputation of the Cook Islands now outweighs those perceived advantages by at least tenfold.
Suffice it to say when these states enacted trust statutes that were similar to the offshore statutes, some of those attorneys who had been drafting offshore trusts now started drafting domestic trusts for the same purposes, and thus the Protector provisions migrated into American usage.
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And if he won't disclose his own relationship with tax loopholes and offshore tax havens, leaving voters more questions than answers, how can the American people trust him to reform our tax code in a way that closes loopholes, eliminates free-riding and ensures that everyone is playing by the same rules?
The executive will then register a Limited (Ltd.) company on another offshore tax haven like the Cayman Islands or the British Virgin Islands, and declare that it is owned by his trust in Liechtenstein.
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