Taxing Offshore Asset Protection Trusts: Icing on the Cake?

48 Pages Posted: 13 Jun 2008 Last revised: 30 Jun 2008

See all articles by Elena Maria Marty-Nelson

Elena Maria Marty-Nelson

Nova Southeastern University - Shepard Broad College of Law

Date Written: April 15, 2008

Abstract

Income and transfer tax considerations that favor overseas asset protection trusts (OAPTs) compared to domestic asset protection trusts are contrary to sound tax policy. Tax laws should not operate to encourage taxpayers to move assets overseas to be beyond the reach of US creditors because doing so may undermine the tort system. To the extent asset protection is allowed, OAPTs should not be governed by rules more lenient than those faced by domestic trusts. Estate tax laws regarding creditor access should be interpreted to apply equally to domestic and foreign trusts.

Keywords: tax, offshore asset protection trusts, grantor trusts, creditors

JEL Classification: K00, K34

Suggested Citation

Marty-Nelson, Elena Maria, Taxing Offshore Asset Protection Trusts: Icing on the Cake? (April 15, 2008). Virginia Tax Review, Vol. 15, 1996, Available at SSRN: https://ssrn.com/abstract=1120902

Elena Maria Marty-Nelson (Contact Author)

Nova Southeastern University - Shepard Broad College of Law ( email )

3305 College Avenue
Ft. Lauderdale, FL 33314
United States

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