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Is The Law Unforgiving To Ponzi Scheme Victims?

August 19, 2011

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Alaska (and potentially Pennsylvania) law may be or so says the United States Court of Appeals for the Third Circuit.  In Michael S. Rulle Family Dynasty Trust v. AGL Life Assurance Company, the federal appellate court – applying Alaska and some Pennsylvania law – summarily dismissed a trust’s suit against a life insurance company for losses sustained through investments in four funds operated by Bernie Madoff.  In fact, the court went so far as to decide that each of the Michael S. Rulle Family Dynasty Trust’s eight claims against AGL Life Assurance Company failed to state a claim upon which relief could be granted, meaning they couldn’t even get to get into the good stuff through discovery.  Here’s the background:

Who’s a Settlor? Apparently, It’s Harder to Figure Out than You Think.

August 15, 2011

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It’s not uncommon for one person to establish a trust, fund it with some nominal amount (say, $100.00), and then have another person come along and contribute a more significant amount to the trust (say, $70,000.00).  Under these circumstances, who is the settlor of that trust?  A federal appellate court recently answered that question in Roberts v. McConnell.  So, why did a seemingly simple question of “who was the settlor” have to go from a bankruptcy court, to a federal district court, to a federal appellate court?

Hawaii Embraces Asset Protection

August 12, 2011

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Hawaii Embraces Asset Protection

August 12, 2011

Authored by: Luke Lantta

Last month, Hawaii added itself to the growing list of states that permit trusts that are both dynasty trusts and asset protection trusts by enacting the Permitted Transfers in Trust Act.  The Governor’s office described the law as “strengthen[ing] Hawaii’s trust laws and allow[ing] Hawaii to compete with other states in this growing industry.”

So, how does Hawaii stack up against other asset protecting states?

2011 Amendments to Delaware Trust Laws

August 8, 2011

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Effective August 1, 2011, a number of new changes went into effect changing Delaware trust law.  While the amendments make a lot of changes to the Delaware trust laws, below are some of the changes that are likely to have the biggest impact on litigation concerning Delaware trusts.

Wrongdoing: The amendments have added a definition of “wrongdoing” to clarify its meaning within the definition of “wilful misconduct.”  For purposes of Delaware trust law, “wilful misconduct,” means “intentional wrongdoing, not mere negligence, gross negligence or recklessness.”  Apparently, there was some confusion over the meaning of “wrongdoing,” and, therefore, “wrongdoing” is now defined as “malicious conduct or conduct designed to defraud or seek an unconscionable advantage.”  To the extent that previously there was a benign interpretation of “wrongdoing,” the Delaware Code is now clear that the threshold for a fiduciary to commit “intentional wrongdoing” is quite high.

New Georgia Trust Code Turns One; Reflections on the First Year

July 26, 2011

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On July 1, 2010, the provisions of a completely revised Georgia trust code became effective. This month we celebrate its first anniversary, so it seemed to be a good time to reflect on what were the top “attention-getters” of the new code. In thinking about this “top three” list, we’re reminded of the last time we trained a new puppy. The theme was: reward the good behavior, ignore the bad. Fortunately, the new code will help you take care of your dog and rewards good trustee behavior, but there could be serious consequences for a trustee not complying with some of the new provisions.

1. The Dog: By far and away, for better or for worse, most attention has been focused on the new provisions allowing pet trusts. In the past, we were able to (somewhat) accommodate people’s wishes to provide for their pets upon their deaths by naming an

Gov. Deal signs “Trust Code Technical Amendments Act of 2011”

July 11, 2011

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On May 12, 2011, Governor Nathan Deal signed SB 134, which made a number of technical corrections to the Georgia guardianship and trust codes, corrected terminology, and updated cross-references within the codes. In addition, the bill allows natural guardians of children to consent on behalf of a beneficiary if there is no conflict of interest. The full text of the bill is located here.