Memorandum - Asset Protection Trusts

INTRODUCTION

The greatly increased risk of liability for negligence among professional persons and the related concern about the current cost and availability of professional indemnity insurance have led more and more clients and their advisers to consider the possibility of creating settlements abroad for asset protection purposes. This trend has been enhanced not only by the far more litigious climate that now exists in the business and professional world, especially in the United States of America and certain other countries, but also as a result of legal restrictions in the client's domestic jurisdiction which have the effect of retrospectively invalidating pre-bankruptcy settlements of property if such transactions are adjudged as having been intended to defeat creditors. It is often considerations of these kinds arising under a client's domestic law which cause clients to contemplate some form of foreign trust whose assets cannot be reached by creditors in the event of his