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<p class="MsoNormal"><span style="font-size:16.0pt">Brent,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt">You are remembering correctly – here is a good article by Jay Adkisson who many would say is the go to for DAP- good luck. Also we do have a statute that is important for self-settled trust – RCW 19.36.020
which provides assets in a self-settled trust are not protected from settlor’s creditors (existing and future) where settlor retains beneficial interest.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top:12.0pt;background:#FCFCFC"><b><span style="font-size:27.0pt;font-family:Merriweather;color:#333333">Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background:#FCFCFC"><span style="color:black"><a href="https://www.forbes.com/sites/jayadkisson/" title=""Photo of Jay Adkisson" "><span style="font-size:13.5pt;font-family:"Work Sans";text-decoration:none"><img border="0" width="400" height="400" style="width:4.1666in;height:4.1666in" id="Picture_x0020_1" src="cid:image001.jpg@01D8180C.C4E92EC0" alt="Jay Adkisson"></span></a></span><span style="font-size:13.5pt;font-family:"Work Sans";color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height:12.0pt;background:#FCFCFC"><b><span style="font-size:10.5pt;font-family:"Work Sans";color:#333333"><a href="https://www.forbes.com/sites/jayadkisson/"><span style="color:#333333">Jay Adkisson</span></a></span></b><b><span style="font-size:10.5pt"><o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height:12.0pt;background:#FCFCFC"><span style="font-size:9.0pt;font-family:"Work Sans";color:#737373">Contributor</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt;background:#FCFCFC"><span style="font-size:9.0pt;font-family:"Work Sans";color:#333333"><a href="https://www.forbes.com/personal-finance"><span style="color:#598141">Personal Finance</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height:12.0pt;background:#FCFCFC"><i><span style="font-size:9.0pt;font-family:"Georgia",serif;color:#737373">I cover Wealth Preservation in its legal permutations<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background:#FCFCFC"><span style="font-size:13.5pt;font-family:"Work Sans";color:#333333">Follow<o:p></o:p></span></p>
<ul style="margin-top:0in" type="disc">
<li class="MsoNormal" style="color:#333333;margin-bottom:21.0pt;line-height:22.5pt;mso-list:l1 level1 lfo1;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif"><o:p> </o:p></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:21.0pt;line-height:22.5pt;mso-list:l1 level1 lfo1;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif"><o:p> </o:p></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:21.0pt;line-height:22.5pt;mso-list:l1 level1 lfo1;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif"><o:p> </o:p></span></li></ul>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Debtor Donald G. Huber (Donald) founded United Western Development, Inc. (UWD) in 1968 to invest in real estate. In 2001, Donald was joined by his son, Kevin D. Huber (Kevin), who thereafter
was heavily involved in UWD's business.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">UWD built large home developments, predominantly in the Pacific Northwest. These developments required UWD to obtain substantial financing, which debt Donald was of course frequently required
to personally guarantee.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">By 2007, as the real estate markets were starting to sink, Donald and one of his business partners, Robert Terhune (Robert), began to worry about certain of their real estate projects
and their commitments to each other. When Robert threatened to set up an asset protection trust to stiff Donald, Donald's attorney made it clear to Robert that Donald would consider the setting up of such a trust to be a fraudulent transfer as to Donald as
Robert's potential creditor.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">In August 2008, UWD entered into a $55 million financial deal to be raised by private finance group Houlihan Lokey, some of which was used to retire old debt and some to be used for future
projects. By this time, the real estate market crashed, and UWD's attempts to raise additional financing were unsuccessful.<o:p></o:p></span></p>
<p class="MsoNormal" align="center" style="text-align:center;line-height:10.5pt;background:#FCFCFC">
<span style="font-size:7.5pt;font-family:"Work Sans";color:#8C8C8C;letter-spacing:.25pt">PROMOTED<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">By this time, it was clear that Donald himself was concerned about the sinking real estate market, and the creditors beginning to circle UWD's financial carcass. Donald and Robert began
missing payments in 2008, and in 2009 began receiving notices of default and lawsuits by lenders.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Enter Seattle estate planning attorney Harold Snow (Attorney Snow). In August 2008, while UWD was inking its deal with Houlihan Lokey to try to find additional financing, Donald's son
Kevin sent an e-mail to Snow, telling him that "my father has some assets that he would like to protect and shield."<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Thereafter, and though Donald was up to his neck in personal guarantees, Attorney Snow set up an Alaska domestic asset protection trust (DAPT) called the "Donald Huber Family Trust" on
September 23, 2008. According to correspondence later acquired by creditors, it was a principal goal of the Alaska DAPT to "protect a portion of [Donald's] assets from [his] creditors." There was also much evidence that Donald urgently wanted the Alaska DAPT
set up.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Guided by Attorney Snow, Donald transferred $10,000 in cash and his interests in over 25 of his companies into DGH, LLC, an Alaska LLC set up on September 4, 2008. Then, Donald apparently
funded the Alaska DAPT with a 99% interest in DGH, LLC, with the other 1% being owned by Kevin as the manager.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Donald also transferred other of his valuable assets, such as his personal residence, into another Alaska corporation, and then the stock was transferred to DGH, LLC. The residence was
then leased back to Donald, and the Alaska DAPT made the mortgage payments. Donald admitted that he received no consideration for these transfers.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">In what may fairly be viewed as one of the most blatant attempts to cheat creditors seen in some years, Donald ended up getting two residences, interests in several shopping centers, shares
of companies, including UWD's operating businesses, and $3 million in account receivables into the Alaska DAPT. Donald was left with little more than underwater or valueless assets.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Attorney Snow set up the structure so that Donald was the Settlor of the Alaska DAPT, while his son Kevin, another person, and Alaska USA Trust Company were the Trustees. The beneficiaries
of the Alaska DAPT were Donald and his children, stepchildren, and grandchildren. In 2009, the Trust had $360,000 discretionary beneficiary income, and $345,248 in 2010. Donald himself made requests for distributions from his son Kevin as a Trustee, and Kevin
mostly complied.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Though Donald and his family were receiving benefits, Donald's creditors were stiffed.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Except for a single Certificate of Deposit for $10,000 which was held in Alaska, all the other assets were located in Washington State. Indeed, Alaska USA Trust Company hardly did anything,
and the Court characterized their involvement as "acting merely in the nature of a straw man."<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">If either Attorney Snow or Alaska USA Trust Company had even the slightest ethical or moral qualms about helping Donald cheat his creditors, such is not easily found in the record. To
the contrary, with Donald's personal guarantees outstanding and his real estate holdings valued at 2008 fire sale prices, one must wonder what his "Affidavit of Solvency" (a requirement under Alaska law) looked like.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Hounded by his creditors, Donald eventually tried to file a Chapter 11 reorganization case on February 10, 2011. But by the end of the year, the creditors were able to convert the case
to a Chapter 7 liquidation and a Bankruptcy Trustee was appointed. The Bankruptcy Trustee brought an Adversary Action against Donald, Kevin, the Alaska DAPT, Alaska USA Trust Company, and Donald's companies. The Amended Complaint alleged:<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">First Cause of Action -- Fraudulent Transfer under Bankruptcy Code section 548;<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Second Cause of Action -- Transfers made in violation of Bankruptcy section 548(e) prohibiting transfers to defeat creditors to a "self-settled trust or
similar device";<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Third Cause of Action -- Fraudulent Transfer under Washington State law;<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Fourth Cause of Action -- Transferring or concealing property with intent to defraud creditors under Bankruptcy Code section 727;<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Fifth Cause of Action -- Civil conspiracy to defraud creditors; and<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:1.0in;text-indent:-.25in;line-height:22.5pt;mso-list:l0 level1 lfo2;background:#FCFCFC">
<![if !supportLists]><span style="font-size:10.0pt;font-family:Symbol;color:#333333"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Sixth Cause of Action -- For declaratory judgment that the Bankruptcy Trustee has full membership rights in the Alaska DAPT's main holding company, DGH LLC,
and has the power to vote its interests in Donald's companies holding shopping malls.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">For its part, Alaska USA Trust Company pretty quickly bailed from the case, by a settlement agreement dated December 12, 2012, paying the Bankruptcy Trustee $5,634.95 in cash, and agreeing
to fully cooperate in the litigation, including producing whatever documents and e-mails that it had relating to the case.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">After some skirmishing, the Bankruptcy Trustee simultaneously filed two Motions for Summary Judgment: First, for summary judgment on the fraudulent transfer and related issues; and, second,
to deny Donald a discharge. The Court decided both of these motions in the same Opinion, as shall now be discussed.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Choice Of Law Issue</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Court selected for its first issue that of choice of law, i.e., whether Alaska law or Washington state law applied.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">In federal court, federal choice of law rules apply. With regard to trusts generally, the Court looked to Section 270 of the Restatement (Second) of Conflict of Laws, which says that the
laws of the state whose laws are selected by the settlor will normally apply, so long as the application of that state's law "does not violate a strong public policy of the state with which, as to the matter at issue, the trust has its most significant relationship".
Comment (b) to section 270 further elaborates that<o:p></o:p></span></p>
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<b><i><span style="font-size:12.0pt;font-family:"Work Sans";color:teal">a state has a substantial relation to a trust if at the time the trust is created: (1) the trustee or settlor is domiciled in the state; (2) the assets are located in the state; and (3)
the beneficiaries are domiciled in the state.</span></i></b><span style="font-size:12.0pt;font-family:"Work Sans";color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Court cited to a case that I discussed last year in some depth, <i>In re Zukerkorn</i>, 484 BR 182, 192 (9th Cir.BAP, 2012). <i>See</i> Zukerkorn -- Possible Bad News For Domestic
Asset Protection Trusts In Conflict-Of-Laws Dispute, at <a href="http://goo.gl/0nWZi" target="_blank"><span style="color:#003891">http://goo.gl/0nWZi</span></a><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Here, Donald's Alaska DAPT flopped on all three grounds: (1) Donald resided in Washington state and not Alaska, (2) except of a single $10,000 Certificate of Deposit, none of the assets
were in Alaska and all were in Washington state, and (3) all the beneficiaries resided in Washington state, and none in Alaska. Therefore, Alaska "had only a minimal relation to the Trust" under section 270 comment (b).<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">By contrast, the Court held, "Washington State has a strong public policy against self-settled asset protection trusts," noting that Washington law voided transfers to their existing or
future creditors under RCW 19.26.020. The Court then quoted <i>Marine Midland Bank v. Portnoy</i> (I<i>n re Portnoy</i>), 201 B.R. 685, 701 (Bankr. S.D.N.Y. 1996), where a bankruptcy court considered the public policy of New York against self-settled trusts
when determining a choice of law issue, and held “Portnoy may not unilaterally remove the characterization of property as his simply by incorporating a favorable choice of law provision into a self-settled trust of which he is the primary beneficiary. Equity
would not countenance such a practice.”<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Since under Washington state law the transfers were to a self-settled trust, and such transfers under Washington law were void against against either existing or future creditors, Donald's
transfers of assets into the Alaska DAPT were all void, and the Trustee was entitled to summary judgment on the point. Here, the Court cited to See <i>Rigby v. Mastro</i> (<i>In re Mastro</i>), 465 B.R. 576, 611 (Bankr. W.D. Wash. 2011), which was the subject
of my article, The Washington Woes Of Michael Mastro And Friends, at <a href="http://goo.gl/ENjyA" target="_blank"><span style="color:#003891">http://goo.gl/ENjyA</span></a> (Mastro, another failed real estate developer in the Seattle area, and his wife were
later indicted for bankruptcy fraud and extradited to the United States from France, where they had tried to hide.)<o:p></o:p></span></p>
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<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Alter Ego Challenge</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Trustees next challenge was to the trust on alter ego grounds, and sought to "reverse veil pierce" the Alaska DAPT to get at its assets. Here, the choice of law issue was much clearer
since federal courts apply the law of the forum state, i.e., Washington state in this case, as the Ninth Circuit had done in <i>Goodrich v. Briones</i> (<i>In re Schwarzkopf</i>), 626 F.3d 1032, 1037 (9th Cir. 2010).<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The trouble for the Trustee was that it was not entirely clear whether Washington state even applied alter ego theories to trusts. Thus, in the absence of controlling Washington state
law on the subject, the Court simply declined to grant the Trustee's motion for summary judgment on this point, not that the Trustee was short on ways to bust the Alaska DAPT as we shall soon see.<o:p></o:p></span></p>
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<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Bankruptcy Code 548(e)</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), when enacted major reforms to the Bankruptcy Code. I've yet to meet a single consumer who
was "protected" by the Act, but that's a different story. More pertinently, Congress decided to take on domestic asset protection trusts in BAPCPA, and thus in section 548(e) created a 10-year statute of limitations for transfers "made to a self-settled trust
or similar device" with the "actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made, indebted."<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">In other words, if one sets up a self-settled trust, i.e., Domestic Asset Protection Trust or a Foreign Asset Protection Trust, for asset protection purposes, then a creditor has up to
10 years under section 548(e) to set the transfer aside. When section 548(e) was passed, many of us who practice in the area of creditor-debtor law thought that self-settled trusts were finally dead, and that no planner who wasn't dosing heavily on mescaline
would recommend them to their clients. We were right on how 548(e) worked, but we were wrong that they would cease to be marketed.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Donald was forced to concede that every element of 548(e) had been met by the Trustee, except one -- intent. Apparently with a straight face, Donald claimed that he never intended to "hinder,
delay, or defraud" any of his creditors.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Court could have just snickered and moved on, as this is a textbook case of somebody very openly trying to cheat their creditors. Nonetheless, the Court engaged in a patient analysis
of fraudulent transfer law, noting that a finding of fraudulent transfer may be based on wholly circumstantial evidence, i.e., the "badges of fraud" that have characterized this area of the law since Lord Coke first pronounced them in his opinion in Twyne's
Case, decided in the Year of Our Lord 1601.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Here, "the Trustee submitted over one hundred exhibits containing declarations, emails, documents, and pleadings to establish the Debtor’s intent to hinder, delay, or defraud his creditors."
By contrast, Donald's only contrary evidence was his own sworn deposition testimony to the effect that he didn't mean to harm his creditors and was only engaging in good old estate planning. Lord Coke would not have been impressed by Donald's self-serving
denials, and neither was the Court here.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Court pointed out what was obvious: Donald waited until there was the threat of litigation to start his planning, Donald transferred basically all of his valuable property into the
Trust, Donald has a "special relationship" to the Trust as both the settlor and a beneficiary, Donald effectively maintained control over the Trust's property through his son as co-Trustee, and Donald continue to enjoy the fruits of the assets transferred.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">But even more importantly, it was obvious that Donald set up the trust for asset protection:<o:p></o:p></span></p>
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<b><i><span style="font-size:12.0pt;font-family:"Work Sans";color:teal">While the Debtor alleges that he consulted Mr. Snow and created the Trust merely for estate planning purposes, the timing of the Trust’s creation, the facts surrounding its creation, and
timing of the asset transfers support a finding of a motive other than estate planning, that of asset protection at the expense of his creditors. Furthermore, the Debtor has not presented any evidence refuting the Trustee’s overwhelming evidence that when
the Trust was created, the Debtor was desperate to protect his assets and knowledgeable of the purpose of a spendthrift trust.</span></i></b><span style="font-size:12.0pt;font-family:"Work Sans";color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">It is at this point that Donald's defense turns farcical, as Donald then argued that he could not possibly have any intention to cheat his creditors because he relied upon the advice of
Attorney Snow, and such "negates fraudulent intent." But the Court pointed out that such reliance had to be made in good faith, <i>citing First Beverly Bank v. Adeeb</i> (<i>In re Adeeb</i>), 787 F.2d 1339, 1343 (9th Cir. 1986), and here Donald both knew that
the Alaska DAPT would cheat his creditor and had no other legitimate reasons for that planning.<o:p></o:p></span></p>
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<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Fraudulent Transfer Under Washington State Law</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Similarly, the Court found that Donald's transfers to his Alaska DAPT violated Washington state's fraudulent transfer laws. Donald had argued here as well that he didn't mean to harm his
creditors, but only meant to engage in estate planning. But, the Court noted the curiosity that neither Attorney Snow nor Donald's son, Kevin, gave declaration's to support Donald's claimed intent -- perjury being only a signature away. As to Donald's testimony:<o:p></o:p></span></p>
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<b><i><span style="font-size:12.0pt;font-family:"Work Sans";color:teal">while the Debtor’s deposition testimony states that he created the Trust for estate planning purposes, it does not directly address or deny the evidence submitted by the Trustee establishing
that the Debtor wanted to protect his assets in light of his increasingly bleak financial situation. The Court finds that the Debtor’s desire to provide for his children and grandchildren through estate planning by protecting his assets that they would otherwise
stand to inherit, is not mutually exclusive of the desire to shield his assets from creditors. Accordingly, estate planning alone does not create an issue of fact as to intent. See </span></i></b><b><span style="font-size:12.0pt;font-family:"Work Sans";color:teal">Adeeb<i>,
787 F.2d at 1343 (where the court held that if a debtor intended to hinder or delay a creditor, he had “the intent penalized by [section 727(a)(2)(A)] notwithstanding any other motivation he may have had for the transfer.”).</i></span></b><span style="font-size:12.0pt;font-family:"Work Sans";color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Thus, Donald lost under Washington state fraudulent transfer law as well.<o:p></o:p></span></p>
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<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Denial of Discharge</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The Court denied the Trustee's motion for summary judgment which sought to deny Donald his discharge, on the basis that certain material facts were in dispute such that the Trustee had
not yet met his very high burden of proof required to deny Donald his discharge. Although the opinion is somewhat cryptic on this point, apparently Donald could still win his discharge if he can prove that he was mislead as to whether the transfer of assets
was legal or not based on the advice he received from counsel. In other words, Donald's reliance on counsel were of little consequence on the fraudulent transfer action but might be a good defense for Donald on whether he gets his discharge.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The denial of summary judgment on discharge issue only means, of course, that the Court will not likely hold a bench trial to determine the issue. Stay tuned.<o:p></o:p></span></p>
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<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">ANALYSIS</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">I can hear the chants already, "Bad facts make bad law". Yea, verily that is true, but it is as true that the law made from "bad facts" is every bit as valid as the law made from the "good
facts" cases which are seen in the self-settled trust context, foreign and domestic, less often than the Higgs Boson.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">This case was decided at the bankruptcy court level, and will now presumably go up on appeal to the Ninth Circuit's Bankruptcy Appellate Panel (BAP). If this opinion stands (or if it gets
worse, as the 9th Circuit BAP has historically shown little sympathy for debtors such as Donald and have frequently written opinions more acerbic than those below), then it is a disaster for those who plan with Domestic Asset Protection Trusts. If it is reversed
by the BAP, then hope shall again spring eternal for the DAPT crowd.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">But as the opinion sits today, it is a landmark catastrophe for Domestic Asset Protection Trusts, and here is why:<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">First, this Opinion validates that Bankruptcy Code section 548(e) will be interpreted very negatively towards those who set up "self-settled trusts or similar devices". With a 10-year
Statute of Limitations for transfers to self-settled trusts, and with federal bankruptcy law trumping contrary state law in bankruptcy court, who in their right mind wants to sit around for 10 years after the transfers to such a trust before the assets have
a chance of being protected in bankruptcy?<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Second, this Opinion validates the concerns of many, including Yours Truly, that the laws of the DAPT state where the trust is formed would not apply where the settlor, beneficiaries,
and/or trust assets are in the non-DAPT state. We now have an Opinion where the law of the forum state, and not the DAPT state applied -- there is no opinion yet where the laws of the DAPT state have applied.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Note also that the suggestions of some planners to "seek a declaratory judgment first in the DAPT state" would not have been possible here, since the Bankruptcy Trustee had no connection
to Alaska, and thus was not amendable to a declaratory judgment lawsuit there. See article, Will Declaratory Judgment Actions Be The Savior Of Domestic Asset Protection Trusts? Probably Not, at <a href="http://goo.gl/PYVSm" target="_blank"><span style="color:#003891">http://goo.gl/PYVSm</span></a><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Will Declaratory Judgment Actions Be The Savior Of Domestic Asset Protection Trusts? Probably Not, at <a href="http://goo.gl/PYVSm" target="_blank"><span style="color:#003891">http://goo.gl/PYVSm</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">What that leaves us with is that domestic asset protection trusts are only valid if the settlor and beneficiaries and trust assets are all in the DAPT state, and the settlor manages to
stay out of bankruptcy for at least 10 years. Those are the "working parameters" of DAPT planning.<o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">One cannot call the planning here anything like valid asset protection planning. To the contrary, this was just straightforward fraud on creditors. In older times, a planner who got caught
doing something like this would voluntarily surrender their Bar license in the hopes of saving at least an iota of professional respect from their colleagues, by not further demeaning the profession. Unfortunately, for some attorneys these days such gutter
planning is the new normal. It remains to be seen whether or not the Trustee decides to pursue the counsel involved in this fiasco for conspiracy or Civil RICO, see Peter Rogan And Attorney Fred Cuppy Indicted For Post-Claim Asset Protection Planning - Attorney
Sued For Civil RICO - Trust Held Alter Ego Of Settlor, at <a href="http://goo.gl/SCR3m" target="_blank"><span style="color:#003891">http://goo.gl/SCR3m</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">We also see in this opinion that once again the "estate planning excuse" flops in a major sort of way. Simply reciting "estate planning" doesn't create some special privilege to engage
in blatant fraudulent transfers. Indeed, it is probably not lost on the court that a debtor in financial distress probably has little estate outside of exempt assets to protect.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">As in this case, self-serving statements by the debtor that they had some other reason for their planning other than to cheat creditor, tends to fall on deaf ears. As a practical matter,
in post-judgment proceedings, it would not be far from the mark to say that "everybody expects the debtor to lie". The debtor had better have substantial documentary evidence that his planning was for some reason other than to cheat creditors, if the debtor
wants the court to believe that point.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Here, the planning not only didn't work, but it also put Donald and his family into a potentially worse position than if they had done nothing at all. Donald now faces the loss of his
discharge in bankruptcy, and the odds are probably good that the Trustee will next go after Donald's children and grandchildren who received money from the Alaska DAPT and make them repay whatever benefits they received. The Alaska DAPT didn't cause Donald's
creditors to settle for pennies on the dollar, and instead resulted in disaster.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Unlike the other DAPT disaster, Mortensen, this was a case where the debtor had skilled (if not particularly ethical) counsel to do the planning, and had very good litigation attorneys.
This is not a case where there was some sort of failure in litigation, but rather the failure was all in the planning -- it should never have been done in the first place. See <i>Battley v. Mortensen</i>, Adv. D.Alaska, No. A09-90036-DMD, May 26, 2011 (Original
Memorandum) and July 18, 2011 (Memorandum Denying Motion For Reconsideration). Opinion at <a href="http://goo.gl/7gWjA" target="_blank"><span style="color:#003891">http://goo.gl/7gWjA</span></a> and article, Mortensen: Alaska Asset Protection Trust Funded
By Solvent Settlor Completely Fails To Protect Assets In Bankruptcy Against Future Creditors, at <a href="http://goo.gl/1TPMn" target="_blank"><span style="color:#003891">http://goo.gl/1TPMn</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">The bottom line is that the law for domestic asset protection trusts is getting worse, not better. Despite predictions that the law would ultimately shake out in favor of DAPTs (just as
was predicted, and didn't, with FAPTs two decades before), it hasn't started going that way yet. Thus, for those who continue to put their clients into DAPTs without full and honest disclosure of the risks, the best advice for those planners is to </span><b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:red">keep
their E&O limits high and their policy premiums fully paid up.</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">CITE AS:</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<i><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Waldron v. Huber</span></i><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"> (<i>In re Huber</i>), 2013 WL 2154218 (Bk.W.D.Wa., Slip Copy, May 17, 2013). Full
Order at <a href="http://goo.gl/1TPMn" target="_blank"><span style="color:#003891">http://goo.gl/1TPMn</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">CASE DOCUMENTS:</span></b><span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Trustee's Amended Complaint, filed November 30, 2012 -- <a href="http://www.assetprotectionbook.com/casedocs/huber/62_Amended_Complaint_30nov12" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/62_Amended_Complaint_30nov12</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Kevin Huber's Answer to Amended Complaint, filed December 12, 2012 -- <a href="http://www.assetprotectionbook.com/casedocs/huber/78_Answer_AmComp_HuberK_12dec12" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/78_Answer_AmComp_HuberK_12dec12</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Alaska USA Trust Company's Motion To Approve Settlement, December 12, 2012 - <a href="http://www.assetprotectionbook.com/casedocs/huber/80_MoAppSett_Alaska_12dec12" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/80_MoAppSett_Alaska_12dec12</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Alaska USA Trust Company's Settlement Agreement With Trustee - <a href="http://www.assetprotectionbook.com/casedocs/huber/80-3_Settle_Alaska_12dec12" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/80-3_Settle_Alaska_12dec12</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Answer of Dreyer and Other Defendants to Amended Complaint, filed December 18, 2012 - <a href="http://www.assetprotectionbook.com/casedocs/huber/82_Answer_AmComp_Dreyer_18dec12" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/82_Answer_AmComp_Dreyer_18dec12</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Donald Huber's Answer to Amended Complaint, filed January 14, 2013 - <a href="http://www.assetprotectionbook.com/casedocs/huber/93_Answer_AmComp_HuberD_14jan13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/93_Answer_AmComp_HuberD_14jan13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Trustee's Motion for Summary Judgment on Fraudulent Transfers - <a href="http://www.assetprotectionbook.com/casedocs/huber/123_MoSJ_Trustee_Transfers_07mar13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/123_MoSJ_Trustee_Transfers_07mar13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Trustee's Motion for Summary Judgment on Denial of Discharge - <a href="http://www.assetprotectionbook.com/casedocs/huber/124_MoSJ_Trustee_Discharge_07mar13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/124_MoSJ_Trustee_Discharge_07mar13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Summary Judgment Response - <a href="http://www.assetprotectionbook.com/casedocs/huber/127_RespSJ_Trustee_13mar13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/127_RespSJ_Trustee_13mar13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Donald Huber's Response to Trustee's Motion for Summary Judgment - <a href="http://www.assetprotectionbook.com/casedocs/huber/133_Resp_HuberD_08apr13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/133_Resp_HuberD_08apr13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Trustee's Reply on Motion for Summary Judgment - <a href="http://www.assetprotectionbook.com/casedocs/huber/135_Reply_Trustee_11apr13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/135_Reply_Trustee_11apr13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Declaration of Branfield in Support of Motion for Summary Judgment - <a href="http://www.assetprotectionbook.com/casedocs/huber/136_Decl_Branfield_11apr13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/136_Decl_Branfield_11apr13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Exhibit to Branfield Declaration: IRS Proof of Claim form - <a href="http://www.assetprotectionbook.com/casedocs/huber/136-1_IRSProofClaim_11apr13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/136-1_IRSProofClaim_11apr13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Exhibit to Branfield Declaration: EMails Involving Debtor - <a href="http://www.assetprotectionbook.com/casedocs/huber/136-2_EMails_11apr13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/136-2_EMails_11apr13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">Order Granting Motion For Summary Judgment - <a href="http://www.assetprotectionbook.com/casedocs/huber/142_Order_Granting_SJ_17may13" target="_blank"><span style="color:#003891">http://www.assetprotectionbook.com/casedocs/huber/142_Order_Granting_SJ_17may13</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;line-height:22.5pt;background:#FCFCFC">
<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333">This article at <a href="http://onforb.es/10mIRyB" target="_blank"><span style="color:#003891">http://onforb.es/10mIRyB</span></a> and <a href="http://goo.gl/ZI8Jv" target="_blank"><span style="color:#003891">http://goo.gl/ZI8Jv</span></a><o:p></o:p></span></p>
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<span style="font-size:13.5pt;font-family:"Georgia",serif;color:#333333"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><i><span style="font-family:"Script MT Bold"">Diane J. Kiepe<o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-family:"Script MT Bold""><o:p> </o:p></span></i></p>
<p class="MsoNormal">Diane J. Kiepe<o:p></o:p></p>
<p class="MsoNormal">Douglas Eden<o:p></o:p></p>
<p class="MsoNormal">717 W. Sprague Ave.<o:p></o:p></p>
<p class="MsoNormal">Suite 1500<o:p></o:p></p>
<p class="MsoNormal">Spokane, WA 99201<o:p></o:p></p>
<p class="MsoNormal"><a href="mailto:djkiepe@depdslaw.com"><span style="color:#0563C1">djkiepe@depdslaw.com</span></a><o:p></o:p></p>
<p class="MsoNormal">509-455-5300<o:p></o:p></p>
</div>
<p class="MsoNormal"><span style="font-size:16.0pt"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Brent Williams-Ruth<br>
<b>Sent:</b> Tuesday, February 1, 2022 4:47 PM<br>
<b>To:</b> wsbapt@lists.wsbarppt.com<br>
<b>Subject:</b> [WSBAPT] Inc/LLC Tree<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Question to the hive mind:<o:p></o:p></p>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal">PC has called - tells me about how he worked with a Nevada adviser to establish multiple LLC and Inc (based in Wyoming) around a multitude of trusts. <o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal">Now here is what a i know after one call:<o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal">over the WA estate tax threshold, not over IRS threshold. single, one adult child about to have first grandchild. <o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal">From an estate planning perspective only - will Washington recognize out of state entities where there is no contact with that state? I thought there was a Supreme Court case where the Grantor tried to create an out of state (thought it
was Alaska) trust and the Court said, in essence, you can’t just pick a state and say that law controls without having some contact with that state. But now I can’t find it….likely because i’m trying to search too fast. <o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal">Did i dream this case up?<o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal" style="margin-bottom:12.0pt">If this is a legitimate planning strategy that I just don’t know - please send me your referral. It just seems like smoke and mirrors and a way for someone to make a small fortune off this person by creating
a handful of entities for him. <o:p></o:p></p>
<div>
<p><b>Brent Williams-Ruth</b> <br>
<i>Attorney-At-Law</i><o:p></o:p></p>
<p><b>Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC</b><o:p></o:p></p>
<p>Office/Scheduling Phone: (253) 285-7751<o:p></o:p></p>
<p>Direct Mobile: (253) 285-7453<o:p></o:p></p>
<p>500 S. 336th St., Suite 214; Federal Way, WA 98003<o:p></o:p></p>
<p><a href="mailto:Brent@Williams-RuthLaw.com" target="_blank">e-mail</a> / <a href="http://www.williams-ruthlaw.com/" target="_blank">website</a> / <a href="http://www.facebook.com/bwrconsults" target="_blank">facebook</a> / <o:p></o:p></p>
<p><b>As of July 1, 2019 - I began operating as the Law Offices of Brent Williams-Ruth a division of BWR Consulting, PLLC. Please note the new points of contact <a href="mailto:Brent@Williams-RuthLaw.com">Brent@Williams-RuthLaw.com</a> and <a href="http://www.williams-ruthlaw.com/" target="_blank">www.Williams-RuthLaw.com</a> </b><o:p></o:p></p>
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