The Secretive World of Shielding Wealth & Hiding Assets in High Net Worth Divorces
An increasing issue in high value complex divorces involves the issue of some spouses relying on out-of-state trust protection laws to shield assets from the estate and ensure that they are not considered community property in the instance of divorce.
This happened to one highly-publicized Texas couple, the Bosarges, leaving Marie Bosarge with fears that she will now go under after her estranged husband allegedly placed almost all of their property into a special trust in South Dakota, a state whose protective trust laws, alongside others such as Alaska, Delaware, and Nevada, have enabled a number of billionaires and other wealthy individuals to shield their wealth from spouses. These states have largely done whatever is necessary to provide these shields, while also trying to stay in compliance with federal laws concerning asset hiding, although courts in states with different trust laws have in some cases brought challenges.
Held in Perpetuity & Provided with Extreme Privacy Rights
Trusts in South Dakota are also perpetual, meaning that they can be held in perpetuity rather than for a fixed period of time, and are assigned asset protection from business partners, creditors, ex-spouses, lawsuits, etc., as well as privacy rights. As a result, even attorneys have difficulty finding out basic details about the trusts because of the strict information protections placed on them by the state, including nondisclosure orders on attorneys and filings in a given divorce case.
Even Beneficiaries Can Be Shut Out of Basic Information About Their Own Trust
South Dakota also takes it a step further in that, while, in most states, any beneficiaries are required to be notified that they have a trust when they reach age 18, this requirement is absent in South Dakota, and as a result, grantors, advisors, and others have the ability to hide the rights even for beneficiaries to obtain information about their own trust.
As a result, it doesn’t matter whether a couple built a business, home, and life together. A spouse can move from being the beneficiary of a number of trusts, to having assets transferred into new trusts—including any personal gifts specifically given to them—that completely limit or shut out their interests without even being notified of the changes, and this is completely in keeping with South Dakota’s laws.
Contact Our Texas Divorce Attorneys for Assistance Today
With a solid background in both civil trial practice and family law litigation, the Brownsville family attorneys of Colvin, Saenz, Rodriguez & Kennamer, L.L.P. provide aggressive, experienced representation to help clients in complex divorces obtain what they need. Contact our family law lead Alison Colvin or another of our attorneys at our offices in Brownsville or Edinburg today to find out what we can do for you.
Resources:
nytimes.com/2016/08/09/business/states-vie-to-protect-the-wealth-of-the-1-percent.html
cnbc.com/2020/05/06/how-marie-and-ed-bosarges-divorce-spotlights-south-dakotas-asset-trusts.html
