Counterpoint on the demise of the FAPT FAPTs have been abused to harbor funds derived from illegal or unethical activities and structured so that the settlors do not in reality relinquish control. This is the point that the opposing camp argues. They suggest that the facts in the Anderson are not typical and that the trust document was not properly structured or implemented. Engel is a lawyer and specialist on the use of asset protection trusts in financial planning. He recently completed a paper entitled, Asset Protection Planning and Contempt of Court for the American Bar Association which addresses the implications of the Anderson case.
Sanctions can include fines, forfeiture of rights, and imprisonment.
Engel pointed out that the Ninth Circuit was clearly aware that the Andersons retained control of the trust assets, even though they attempted to hide that fact. Moreover, the very definition of an event of duress that the Andersons assert has occurred makes clear that whether or not an event of duress has occurred depends upon the opinion of the protector. Therefore, notwithstanding the provisions of the trust agreement that the Andersons point to, it is clear that the Andersons could have ordered the trust assets repatriated simply by certifying to the foreign trustee that in their opinion, as protectors, no event of duress had occurred. As such, the impossibility of performance defense will be available to any charge of contempt for failing to comply with the court's order. Although he has worked with Cornez in producing a number of offshore publications, he is clearly on the other side of the fence on this issue.