Eight Questions About the Bridge Trust®, and the Answers Given

Earlier this year we published eight reasons to be cautious about the Bridge Trust®. A promoter of the structure, attorney Brian Bradley, published a point-by-point response. We would rather have that exchange in public than not, so this is our reply to it.

Read carefully, several of his answers respond to a broader claim than the one we made, and two of them agree with us. On the points that matter most — case law and the trustee guarantee — the answer is an assertion that a prospective client has no way to check. That is the difficulty we were pointing at in the first place.

The Eight Points

1. Case Law

The response describes decades of history, thousands of trusts prepared, more than $5 billion protected, involvement in litigation hundreds of times, and no trust ever pierced.

That may all be so. None of it is citable. This was the opportunity to name decisions, and none were named. A prospective client cannot check any of those figures, and a court considering a novel structure cannot be pointed to them either.

The contrast is the point. Cook Islands trust law dates to the 1984 Act as amended in 1989, and the decisions applying it can be read — we publish a case-by-case review of them, including the ones that went badly for the settlor. A track record you can read is a different kind of thing from a track record you are asked to accept.

2. The Trustee Guarantee

The response says two independent, licensed offshore trustees have put commitments in writing to accept and administer the trust upon a properly declared Event of Duress.

A written commitment is not the guarantee being marketed, and the distinction is the whole point. It has become common for trust companies to put out videos — a sign that they stand behind the claims they make privately. Yet no trust company has gone on camera to back up the claim that it guarantees to take over as trustee if a Bridge Trust® is ever triggered.

The reason is that it is a claim that cannot be backed up. An unconditional guarantee would require a trust company to agree in advance to do something it cannot lawfully do: onboard a client without the background check its own regulator requires. Anti-money-laundering review, source-of-funds verification, and sanctions screening apply whenever a trustee actually takes on administration, and no trust company that intends to keep its licence would contract those away years ahead of time.

Promoters will insist the guarantee exists. If it does, publish it. Until then, ask to see the engagement documents rather than a description of them, and read what conditions can suspend the commitment at the point it is needed.

3. Offshore Banking After a Claim

The response says offshore accounts are opened after an Event of Duress routinely, and adds that an account can be opened during the domestic phase so banking is already in place.

Those two answers sit awkwardly together. If opening an account after a trigger is straightforward, the second suggestion is unnecessary. And an offshore account opened during the domestic phase is a foreign financial account, which carries its own reporting — the FBAR at minimum — which is a substantial part of what the structure is marketed as avoiding.

Our concern was narrower than "it cannot be done." It was that no bank guarantees it will be done, on a timetable you control, for a client who is by then in litigation. That remains unanswered.

4. Serving as Your Own Trustee

The response agrees: true, while you hold control, which is why the structure is built to move control out of your hands when it counts.

We agree with the diagnosis and think it proves the point. If holding control is the vulnerability, then the protection depends entirely on the handover working — on time, under pressure, with a court already watching. A structure where control was never held domestically does not have to execute that handover at all.

5. Domestic or Foreign

This is the substantive disagreement, and it deserves to be stated fairly rather than won on a label.

The response says the Bridge Trust® is foreign from inception, established under Cook Islands law, and that only its tax treatment is domestic under IRC §7701. Our view is that the classification matters less than the operative facts, and that a governing-law designation does not by itself relocate anything.

Consider what a court is actually looking at during the domestic phase: a U.S. grantor, a U.S. trustee administering the trust, U.S. beneficiaries, a U.S. protector, and assets held in U.S. accounts. Naming a foreign jurisdiction in the instrument does not move any of that. State trust codes give effect to a governing-law designation subject to exceptions — Florida's provides that a designation "is not controlling as to any matter for which the designation would be contrary to a strong public policy of this state" — and creditors' remedies are exactly the territory those exceptions occupy. We set the analysis out in full in does naming a foreign jurisdiction make a trust offshore.

A named successor trustee is also not the same as a trustee presently administering a trust, and a successor appointment does not qualify a trust to claim it sits in that successor's jurisdiction. Whatever the deed says, the question a court reaches is where the property is, where administration happens, and who it can reach.

The Bridge Trust® is a domestic trust. It is domestic for tax purposes and domestic for control purposes: a domestic grantor, a domestic trustee, domestic beneficiaries, a domestic protector, and domestic assets. On those facts we do not believe a court would find it to be a foreign trust, and describing it to prospective clients as a foreign trust is a misrepresentation of what it is.

6. The Reporting Burden

The response argues that "manageable" skips what the reporting costs, and that a fully foreign trust triggers Forms 3520 and 3520-A every year with harsh penalties, running for the life of the trust against a lawsuit that may never come.

We will take the other side of this one, plainly: we like the offshore reporting. It is the part of the structure most often sold as a drawback, and it is closer to an asset.

Start with what it buys you. The filings produce a dated, contemporaneous, government-filed record that the trust was disclosed from the year it was funded — that you reported properly, complied with the rules, and were not doing anything you needed to keep quiet. When a creditor's argument is that you hid something, that record is the direct answer, and it is not an answer you can assemble after the fact. Whether a transfer was disclosed or concealed is an enumerated factor in fraudulent-transfer law, so the paperwork people treat as the cost of going offshore is the same paperwork that helps legitimise the plan in front of a court.

Then the cost. For a straightforward structure, budget roughly $2,000 to $3,000 a year for a CPA who prepares these returns regularly. Paying that to hold a provable compliance record is not a reason to decline or delay offshore planning. It is closer to an insurance premium on the credibility of everything else in the structure.

Then the difficulty, which is routinely overstated. Handled badly, foreign-trust reporting is genuinely problematic — but so is flying, and nobody drives instead because aviation has a demanding maintenance regime. With competent guidance the client's own part is small: you supply the year's records and you sign. The preparer does the form. What you cannot delegate is making sure it happens, because Form 3520-A falls due before your personal return, and that mismatch is the single most common way a sound structure produces a bad year.

The penalty framing gets overstated in the same direction. IRC §6677 caps the penalties it authorises at the gross reportable amount and excuses failures due to reasonable cause, and since late 2024 the IRS reviews a reasonable-cause statement before assessing rather than assessing automatically. We make the full case in foreign trust reporting: what you actually need to know.

So the trade is worth stating precisely. The hybrid structure avoids these filings during its domestic phase — and avoids, with them, the contemporaneous record of disclosure that the filings create. That record is most valuable in exactly the situation the whole plan exists for.

7. Cost

The response puts a proper fully foreign trust at $40,000 to $75,000 or more to set up, plus annual trustee fees and foreign tax filings.

That is not our pricing. We charge a $25,000 flat fee to establish a fully offshore Cook Islands Trust and $7,000 per year thereafter, covering trustee administration, ongoing legal oversight, and trust-protector fees. Those numbers are published and have been for some time.

Whatever the merits elsewhere, a cost comparison against figures well above our published fee is not a comparison with us. Ask any provider — including us — for a complete written fee schedule covering setup, annual maintenance, and tax preparation, and compare the totals rather than the headline.

8. Moving Assets After a Claim

The response agrees that changing trustees and moving assets after a lawsuit is a problem, and says the Bridge Trust® never does that: it is created, funded, and offshore-founded before any claim exists, so when it triggers nothing is transferred — only administrative succession inside a trust that always existed.

That framing does a lot of work. Changing the trustee and moving the assets after a lawsuit is precisely what the structure relies on, and describing it otherwise misrepresents how the Bridge Trust® operates. Something does change at the trigger, and it changes in response to a legal threat: who administers the trust, and in most descriptions where the assets are held. Characterising that as purely administrative does not remove it from a court's view, because the steps still have to be carried out by people and institutions a court can reach.

That is the practical exposure. A domestic trustee, a protector, or a U.S. bank can be ordered to preserve the status quo while a dispute is heard, and an order directed at any of them can interrupt a sequence that has not finished. The structure's protection depends on completing a series of steps at exactly the moment a court is most attentive to them.

What We Take From the Exchange

Two of the eight answers concede the point. Several respond to a wider claim than the one we made. The two that matter most — the case law and the trustee guarantee — rest on assertions a prospective client cannot verify: a litigation record with no decisions named, and commitment letters described but not published.

That is not a claim that the Bridge Trust® is unlawful. It is lawful, it is sold by licensed attorneys, and reasonable people choose it. It is a claim about what you can check before you commit, which is the only protection available to you before a dispute arrives.

Our recommendation has not changed, and the reasoning is structural rather than promotional: put the trustee, the administration, and the banking in place before there is a claim, so that fewer things have to happen correctly once there is one. If you want to compare the two approaches against your own exposure, talk to our attorneys.