One cannot call the planning here anything like valid asset protection planning. To the contrary, this was just straightforward fraud on creditors.
Asset protection is a difficult game, mostly because it’s not a “game” at all. Done right, asset protection is a natural consequence flowing from proper legal planning. Done wrong, asset protection is an unnatural manipulation of otherwise proper legal planning to defraud legitimate creditors.
The case of Waldron v. Huber is illustrative of the latter.
To say Waldron v. Huber is a complex case would be a gross understatement. The Huber case included Alaska LLCs, Washington properties, a failing partnership, and a Domestic Asset Protection Trust (DAPT). A recent Forbes article, titled “Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case,” provides an accurate description of the outcome.
Bottom line: in Huber, the courts found the legal planning to be too-good-to-be-true. The comprehensive analysis of the case by the Forbes article is instructive, highlighting certain considerations before electing to deploy a DAPT as part of your asset protection planning.
Reference: Forbes (May 22, 2013) “Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case”