Asset Protection

1. Minimize the risk of litigation by appropriate planning and proper legal advice. 

2. Onshore and Offshore Counsel to review the Trust Agreement.

3. Ensure the assets to be settled into the CPT do not represent a majority of the Settlor's net worth.  The Trustee may apply a percentage criterion (say 50% to 66%) as a policy. 

4. Obtain Affidavit as to Settlor's intent in undertaking the planning (see Appendix 2). 

5. Obtain Certificate of Solvency (and/or Affidavit to same effect). 

6. Transfer the assets to the Offshore jurisdiction, where they are under the control of the Trustee. 

7. If the underlying Company is to be formed to hold assets, ensure Trustees also provide Directors for the underlying Company, to ensure the Trustee has full control over all of the Trust assets. 

8. Do not accept underlying assets located in the United States. 

9. Ensure Trust Agreement contains adequate indemnities for legal costs in favor of the Trustee, supported by assets over which the Trustee has direct control.  Consider insuring this risk. 

10. Ensure Trustee is satisfied as to the continuing good reputation of the Settlor: also that Settlor will maintain good business practice as regards those assets not transferred to the Trust. 

* [ The Author wishes to acknowledge the assistance of Barry S. Engel of Engel & Rudman P.C. in formulating the above checklist.]