Reid K. Weisbord, Professor of Law at Rutgers Law School, has made available for download his article, “A Catharsis for U.S. Trust Law: American Reflections on the Panama Papers.” The abstract reads as follows:
In April 2016, a massive leak of confidential legal documents, now known as the “Panama Papers,” attracted international scrutiny and condemnation of offshore asset protection trust arrangements. Such trusts are legal to create but notoriously susceptible to abuse by wrongdoers seeking to hide assets from the peering eyes of tax collectors and creditors. The Panama Papers offer compelling evidence of something long suspected but difficult to prove for lack of transparency — even though asset-offshoring techniques may be used for legitimate purposes, they are, in fact, too often abused as a cover for criminal activity and tax evasion. In response to the leak, the U.S. Department of Justice and several foreign law enforcement agencies opened investigations into the financial improprieties uncovered by the Panama Papers. However, before criticizing offshore trust havens for capitalizing on fraudulent behavior at the expense of nonresident claimants, U.S. state lawmakers should first reflect upon the recent wave of domestic trust legislation authorizing similar conduct here at home. This Piece is a patriotic catharsis lamenting the recent trend of U.S. trust law to sanitize some of the most controversial and widely abused offshore trust practices and urges lawmakers to take steps toward its reversal. Three aspects of U.S. trust law, in particular, have authorized asset protection techniques similar to those permitted in offshore trust havens: (1) self-settled asset protection trusts, (2) nonresident tax shelters, and (3) trust secrecy. The Piece concludes with a discussion of existing federal law protections against domestic trust abuse and recommendations for reform.
Download full article at: A Catharsis for U.S. Trust Law: American Reflections on the Panama Papers by Reid K. Weisbord
Posted by Damien Lee, Associate Editor, Wealth Strategies Journal.