Twenty-Nine Failed Offshore Trust Cases? What the Decisions Say

On 13 August 2025, a subscriber newsletter carried a list of twenty-nine court decisions presented as failed foreign asset protection trusts, under the heading that domestic trusts are superior. Within a year the same author's count had been a chart of forty-five, then twenty-one, then three articles by other people, and then - asked to name a single decision - one case.

We have read all twenty-nine. Every one of them appears in our case-by-case review, with links to the decisions, so you can check the analysis instead of taking our word for it. This piece does not re-run all twenty-nine. It points at the entries where the gap between the summary and the decision is widest, at two claims in the same newsletter that deserve more attention than the list, and at one fact that matters more than any of them: the forty-five-case chart came down in August 2026, and this list did not. It is still in the archive, under the same byline, dated and numbered and citable.

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LISI Asset Protection Planning Newsletter #450, 13 August 2025. Captured 5 September 2026, when the page was still returning publicly without a subscriber login. The image links to the newsletter itself so the date, the number and the byline can be checked directly.

The number that will not sit still

Take the sequence on its own, before any individual case.

Twenty-nine, in the newsletter of 13 August 2025, described there as "a comprehensive list."

Forty-five, in a chart titled "45 FAPT Cases Gone Wrong" carrying a 2025 copyright line. Written notice that it contained duplicates, non-trust cases, and cases the structure won went out on 18 November 2025. It was declined the same day, and the chart was republished in January, March and May 2026.

Twenty-one, after the flaws were set out publicly - published as "Failed FAPT #21." More than half of the forty-five simply went away, with no note of which entries were withdrawn or why.

Three articles by other authors, on 10 August 2026, the day the chart came down. We redlined all three. Every one of them has since moved: one now carries our corrections inline, one was rewritten in August 2026 so that it no longer presents its cases as offshore trust failures, and one has been removed outright.

One case. Asked to name a single decision in which a properly formed trust - independent trustee, funded before any claim arose, settlor not in control - failed on the merits, the case offered was FTC v. Affordable Media.

Counting is not the same as reading. A claim that arrives at a different number each time somebody checks it was never resting on the decisions.

The chart came down. This list did not.

This is the part that matters most, and it is not about any individual case.

On 10 August 2026 the forty-five-case chart was removed from LinkedIn. The accompanying statement was explicit about what would happen next:

At your request, I have removed that chart from my past postings. If you find any posts that I missed, you should email me directly.

This is one he missed.

Newsletter #450 is the direct predecessor of the chart. It carries the same defect - the same non-trust cases, the same summaries that describe facts the decisions do not contain - and it is still in the LISI archive under his byline, dated 13 August 2025, numbered, and citable. It was still retrievable on 5 September 2026, which is the capture reproduced at the top of this page.

That matters for a practical reason rather than a rhetorical one. A chart on a social feed scrolls away. A numbered newsletter in a subscriber archive is what practitioners cite. It is the version that gets found by an advisor researching the question in two years' time, and it is the version a reader is most likely to treat as authoritative, precisely because it looks like scholarship rather than marketing.

Removing a graphic while the article version stays in an archive does not correct the record. It relocates it.

What the twenty-nine turn out to be

The newsletter sorts its twenty-nine decisions into six categories and gives each a one-line summary. The categories are doing most of the persuading, because almost nobody clicks through to the decision. When you do, the entries fall into groups that have nothing to do with whether offshore trusts work.

All twenty-nine are treated individually in the case-by-case review, which links the decisions so the analysis can be checked rather than taken on trust. What follows is what the groups amount to.

Five entries involve no foreign asset protection trust at all.

• Chadwick v. Green (his #6) - no trust. Offshore annuities and a Panamanian bank account he controlled personally.
• FTC v. Fortuna Alliance (#11) - no trust. Corporate funds in an Antiguan bank account in the company's own name.
• U.S. v. Plath (#24) - no asset protection trust. Offshore credit-card accounts.
• The Jerome Schneider matter (#20) - no asset protection trusts. Sham offshore banks and corporations.
• Fortney v. Kuipers (#12) - the transfers were domestic, despite a summary saying assets were moved offshore.

A list of trust failures that contains no trust is not evidence about trusts. It is evidence about people who moved money and got caught, which is a different subject and one on which we agree with him.

Four more do not describe a trust being defeated - on his own one-line summaries. No reading of the underlying decisions is needed to see this; the summaries do it themselves.

• SEC v. Brennan (#21) - described as a "bankruptcy fraud conviction." A conviction is not a finding about a trust.
• Indiana Investors v. Fink (#28) - a Cook Islands trust "frozen by TRO." A temporary restraining order is an interim order preserving the status quo, not a judgment against a trust.
• Gilmore v. AsiaTrust (#29) - a court "asserted jurisdiction over offshore trustee." Jurisdiction is the power to hear a dispute. It is not assets recovered.
• U.S. v. Butselaar (#19) - a tax attorney jailed for hiding money offshore. No trust appears anywhere in the description.

A case the structure won, filed as a loss. Riechers appears under divorce, summarised as offshore trust assets being included in the marital estate. The court accepted the Cook Islands trust as legitimate and disclaimed jurisdiction over its corpus. That is the outcome an offshore trust is bought to produce.

Entries whose own wording does not support the heading. The summary for Eulich v. U.S. says the debtor was "threatened with jail until assets repatriated." He produced the documents, was purged of contempt, and no assets were ever repatriated. "Threatened" is the tell: the sentence describes a threat, not a failure.

Cases where the offshore barrier was never tested. In Barbee v. Goldstein the trustee and Protector consented to winding the trust up, so nothing was tested against a refusal. The wider record of these lists, and the questions put to their author, is set out in Steven J. Oshins and the offshore case-law record. In SEC v. Solow the Cook Islands trust was settled by the debtor's wife and Cook Islands law was never applied; the contempt addressed his own post-verdict transfers to her, and the SEC attacked those transfers separately in a fraudulent-transfer action against Mrs. Solow. In SEC v. Bilzerian the contempt was for refusing a sworn accounting, and the only asset actually reached was U.S.-situs real estate - the offshore corpus was not.

And the case that was finally named. In FTC v. Affordable Media the settlors were their own Protectors, held the power to force repatriation, had already withdrawn over a million dollars, and tried to resign as Protectors only after the FTC identified the role. It is a decision about a settlor who never let go of the controls. It is also a Cook Islands case, so it cannot demonstrate a domestic trust failure either.

The miscitations, in one place

The twenty-nine are not a self-contained problem. They were the seed of the forty-five, and the same entries recur across every version of the list and across the three third-party articles that repeated it. Set out plainly, the defects in the forty-five-case universe are these.

A duplicate counted twice. In re Brooks duplicates Sattin v. Brooks - one bankruptcy, listed as two separate entries under Bankruptcy Fraud. The Merry Morris matter is not a second duplicate: the chart lists Morris v. Morris / Morris v. Wroble as a single entry.

Entries that cannot be located at all. In re Steering Committee and In re Tinsley could not be found despite extensive research. They are presented as part of the count, but there is nothing behind them to read. We have not written them up for the same reason: writing a summary of a decision nobody can produce would be fabrication.

Non-trust matters. Beyond the five above, the broader list reaches offshore annuities, foreign bank accounts held in a company's own name, offshore credit cards, and sham offshore banks. Each is a real enforcement story. None is a trust.

Cases in which the trust corpus was never reached. Advanced Telecommunications Network v. Allen, In re Rensin, Sattin v. Brooks, Bank of America v. Weese and Netsphere v. Baron all end with the corpus undisturbed. A decision in which a creditor did not get the assets is a strange thing to file under assets being got.

Contempt orders recorded as trust defeats. The largest single group. A contempt sanction runs against a person, because the court cannot reach the property. That is discussed below on its own terms.

Convictions, TROs and jurisdictional rulings. A criminal conviction, an interim restraining order and a finding that a court may hear a case are three different things, and none of them is a judgment reaching trust assets.

That is the arithmetic behind the number. Strip out the duplicates, the entries nobody can locate, the matters with no trust, the cases the structure won, and the orders that ran against a person rather than a res, and the residue does not support the heading the list carries.

Zero: what the offshore record does not contain

Here is the claim the list exists to defeat, stated as precisely as we can put it.

In no reported decision our attorneys have reviewed has a properly formed, timely funded foreign asset protection trust - independent licensed trustee, funded before any claim existed, settlor not in control - been defeated on the merits. Not one, across every version of every circulating list, and across the three third-party articles that repeated them.

That sentence is deliberately bounded, and the boundary is not a hedge. It is a statement about decisions our attorneys have read, not a guarantee about anyone's case and not a claim about disputes that settled quietly or never reached a reported opinion. Anyone who offers you an unqualified promise about litigation you have not had yet is selling something. What the record shows is narrower and more useful: when these cases go badly, they go badly for reasons the client controlled.

Every adverse outcome traces to TICC conduct - bad Timing, Illegal activity, a failure to Comply, or too much Control. None is a property of the jurisdiction.

Seven: where the structure was tested and held

A record with no wins in it would be as suspect as a record with no losses. Seven decisions on these very lists show an offshore trust tested by a creditor who wanted the corpus - and not getting it.

Be clear about the unit being counted, because this is where the argument usually goes wrong in both directions. The question a list of "failed FAPT cases" purports to answer is whether the structure works. That is a question about the trust: was the corpus reached, or was it not. It is not the same question as whether the settlor had a good outcome, and the two answers can differ. Below, the first four are cases where the answer to both is yes. The last three are cases where the trust held and the settlor's own conduct still ruined him.

Riechers v. Riechers - the cleanest of the seven. A New York court examined a Cook Islands trust in a divorce, accepted it as legitimate, and disclaimed jurisdiction over its corpus. The list files this one as a failure.

U.S. v. Grant (the Arline Grant matter) - years of repatriation litigation against a Cook Islands structure. A $330,000 payment the list treats as a recovery was a voluntary beneficiary distribution, which is what a functioning trust does. No other trust asset was reached, and on appeal the corpus and the trust-owned entities remained beyond the court's grasp.

Sattin v. Brooks - the court reached stock certificates on a choice-of-law ground, and the trust corpus remained undisturbed notwithstanding the order.

Gilmore v. AsiaTrust - a California appellate court held the New Zealand trustee subject to California personal jurisdiction on the strength of its California business contacts. That is a jurisdictional holding and nothing more: the corpus was not reached. Finding that you may hear a case is not the same as winning it.

Three where the trust held and the man did not

These three are the ones the newsletter uses hardest, and they belong here for a reason that has to be stated carefully rather than skipped.

Marriage of Harnack - the assets were never recovered. That is not our characterisation; it is the list author's own, in the aside quoted below, where he notes the debtor sat in jail and remains there. A creditor who does not get the money has not defeated the trust.

In re Lawrence - a trust funded two months before a $20.4 million award, with the settlor keeping the power to appoint trustees and to exclude beneficiaries. He was jailed for contempt and fined daily. The corpus stayed offshore throughout. Every criticism of his planning is correct, and the trustee still could not be compelled.

SEC v. Bilzerian - contempt for refusing a sworn accounting after a $62 million judgment. The one asset the court actually reached was his U.S.-situs mansion. The offshore corpus was not touched.

What that does and does not mean. In each of the three the creditor walked away without the trust assets, which is the fact a list of trust failures is supposed to be about. So on the structure, they are wins, and filing them under "the trust failed" describes the opposite of what happened to the trust.

They are not wins for the client, and we will not present them as such. A settlor who ends up in contempt has had a catastrophic outcome, and our own write-ups of Harnack and Lawrence say so at length. But look at what produced that outcome in each case: a transfer made on the eve of a known judgment, powers the settlor never gave up, an accounting he refused to provide. Those are choices, and they are TICC again. A client who funds early, gives up control and tells the truth does not arrive at contempt - and the three men who did still did not lose the assets.

One further limit, so the count is honest. Several other entries end with the corpus undisturbed for reasons that have nothing to do with the structure holding - Solow, where the trust was settled by the debtor's wife and the SEC went at the funding transfers instead, in a separate action against her, or Barbee, where the trustee and Protector consented to wind it up. Those are not victories and are not counted. Seven is the number of decisions where a creditor pushed and the structure did not give way.

The other ledger: three domestic wins, twelve domestic losses

The newsletter's purpose is not really to indict offshore trusts. It is to recommend domestic ones - specifically the Hybrid DAPT - on the strength of a superior track record. So the domestic record is the relevant comparison, and we keep it on the same terms, in DAPT Facts.

Three reported wins, and each carries a limit the citing usually omits:

Twelve reported failures. These are not twelve accidents; they cluster into four mechanisms:

• Federal bankruptcy law displaces the state statute. Section 548(e)'s ten-year reach-back and its "similar device" language override state characterization entirely - Mortensen, Huber, Castellano, Cyr, Erskine.
• Another state's law decides the question. Where the assets, the settlor or the marriage sit outside the DAPT state, the forum applies its own public policy - Huckaby, Huber, Dahl, Netter, Kilker.
• The exclusive-jurisdiction clause binds nobody else. The provision meant to force creditors into a friendly forum is unenforceable past the enacting state's borders - Toni 1 Trust v. Wacker, Kloiber.
• The trust was never really separate. Retained powers, self-trusteeship and personal use collapse it on its own terms - Erskine, Magliarditi.

Two of those deserve emphasis against the newsletter's own framing. Toni 1 Trust v. Wacker was decided by the Alaska Supreme Court, about Alaska's own statute, and it holds that the exclusive-jurisdiction provision cannot bind a sister state or a federal court. And in Battley v. Mortensen the settlor was an Alaska resident using an Alaska trust, funded before any creditor held a claim, with the statutory solvency affidavit on file - and the transfer was avoided anyway.

That is the comparison. Not "offshore trusts sometimes produce ugly headlines" against "domestic trusts rarely get sued," but a record of decisions on both sides, kept the same way.

The jail entries give the game away

This is the most revealing thing in the newsletter, and it is not in the list - it is in the author's own aside about the Harnack matter:

No, a FAPT didn't "work" if the debtor had to sit in jail for many years and is still sitting in jail. FAPT proponents seem to count these as victories. No, these are failures!

Read what that concedes. The assets were never recovered. The creditor did not get the money. The court did what a contempt power lets it do - it acted on the person, because it could not reach the property.

That is a real and serious cost, and nobody should pretend otherwise: a client who ends up in contempt has had a catastrophic outcome, and our own writing on Marriage of Harnack and In re Lawrence says so plainly. But it is a fact about a debtor who kept control and refused an order, not a fact about the jurisdiction. Those debtors were not lawful planners who funded early and stepped back; they were people fighting a judgment they already had.

Filing that under "the trust failed" describes the opposite of what happened to the trust.

"Only one bad DAPT case"

The newsletter's case for domestic trusts rests on a scarcity claim: that there are only a few DAPT decisions and only one of them - Huber - is bad for DAPT planners, and that the Huber court got it wrong.

Two problems.

There is a second one, and he analysed it himself. The same publication carries two newsletters about United States v. Huckaby - one by Jay Adkisson under a title stating that a Nevada domestic asset protection trust failed to protect California real estate, and one that is the same author's own analysis of the case. In Huckaby a federal court held that whether the land could be reached was governed by the law of the place the land sits. California Probate Code voids self-settled spendthrift provisions, so the government's judgment lien reached the property. No misconduct was needed to get there - which is precisely what makes it a harder case for domestic planning than a contempt order against someone hiding assets.

There are also the other ten above, decided in Alaska, Washington, Utah, Connecticut, Delaware, Nevada, California, Illinois, Texas and Tennessee.

Few cases is not a track record. "Only one bad case" and "a far superior track record" describe an absence of litigation, not a record of wins. A structure that has rarely been tested and one that has been tested and held are not the same claim. The Hybrid DAPT has been described as undefeated; the useful question is how many reported decisions have ever tested one.

And the standard is not applied evenly. An adverse domestic decision is "1,000,000% wrong." An offshore contempt order against a settlor who kept control is treated as dispositive. Both cannot be right.

The claim with no case behind it

The newsletter's conclusion, stated twice:

for a resident of a non-DAPT state or a lesser DAPT state, the absolute best asset protection technique is and always will be to use a Hybrid DAPT.

"Is and always will be" is not a statement about case law. No decision establishes it, none is cited for it, and it is the sort of claim that cannot be established by any decision - it forecloses the possibility of contrary authority in advance.

Set against it is the one question that actually separates domestic from offshore, and it does not turn on drafting quality: if a U.S. court orders the trustee of a Nevada trust to turn over the assets, does the trustee comply, or is the trustee prohibited by law from complying? A domestic trustee sits inside the court's contempt power and complies. Three further constraints apply regardless of how well the deed is written - fraudulent-transfer law, the ten-year lookback for self-settled trusts under 11 U.S.C. § 548(e), and a home state's freedom to decline another state's protective statute on public-policy grounds.

The bottom line

Four numbers, and each is checkable.

Twenty-nine decisions on a list that has since been twenty-one, forty-five, three articles and one case, depending on when you asked.

Zero reported decisions our attorneys have reviewed in which a properly formed, timely funded foreign trust with an independent trustee, the settlor not in control, was defeated on the merits.

Seven in which a creditor pushed against such a structure and the corpus survived - in three of them while the settlor's own conduct was costing him his liberty, which is a fact about the settlor rather than about the trust.

Three wins and twelve losses in the domestic record that the list was written to recommend.

Offshore trusts can and do produce terrible outcomes for people who fund them late, keep hold of them, or lie about them, and we publish those decisions too - including the ones that are bad for our own argument. That is what a register is for, and what a chart is not. Ask for the citations rather than the count, read the decisions, and ask the one question that separates the structures.