LIGHTNING RELEASES 05/29/14 — Miami, FL The Coral Gables law firm of Donlevy-Rosen & Rosen, P.A. today announced the publication of its most recent newsletter, detailing a significant win for offshore asset protection planning. A newly published case, Branch Banking and Trust Company v. Hamilton Greens, LLC, (“Branch Banking”) reaffirms the right of individuals and businesses to engage in asset protection planning without the fear of being held in contempt (jailed). The full issue of The Asset Protection News™ is available here: http://trustne.ws/5zks0
What is contempt? How does it affect asset protection?
The most common misconception about offshore asset protection, repeated by laypersons and naïve professionals alike, is that a court will automatically hold a judgment debtor in contempt when the debtor has an offshore asset protection trust. The only proper use of civil contempt is to compel an action. Where a debtor has refused to hand over property in the debtor’s possession, a judge may hold the debtor in contempt until the debtor complies. If the ordered action is impossible to perform, incarceration for civil contempt is no longer permissible.
Those professionals promoting the misconception about contempt and offshore asset protection planning state that when the impossibility (inability to pay the judgment) is created by the debtor (the debtor sets up an offshore trust), then a court may still hold the debtor in contempt. However, the law regarding civil contempt has been unchanged since 1948 when the US Supreme Court, in Maggio v. Zeitz (“Maggio”), established the rule that civil contempt could only be used if the debtor has the present ability to comply.
Federal Court sets the record straight
In Branch Banking, the court considered a request from the plaintiff bank for an order of civil contempt against Richard Bellinger. Mr. Bellinger had personally guaranteed loans made by the defendant companies, and when those companies defaulted, he was sued by BB&T for payment on his guarantee. Prior to a judgment being entered, Bellinger set up an offshore trust. Donlevy-Rosen & Rosen, P.A. drafted the trust documents.
During the contempt hearing, Bellinger testified that he set up and funded the trust after he was sued, but before a judgment was entered. He stated that he wished to protect his assets so as to provide for his daughter’s well-being, and that he no longer exercised control over the assets or the trust. The Court found Bellinger to be credible, and, citing Maggio, stated that Bellinger could not be held in contempt for failing to repatriate the assets – even though he created the impossibility – because he did not have the present ability to comply.
Attorney Howard Rosen, who advised Bellinger’s litigation attorneys, had this to say about the victory: “I was thrilled to see this outcome for Richard Bellinger, and equally thrilled that this published case lays to rest the issue of post-planning contempt. It is not an option when offshore trusts are properly implemented.”
Prior issues of The Asset Protection News™ have addressed the issue of contempt and offshore trusts. Volume XVII, Number 1 simply titled “Contempt of Court” provided a detailed explanation of the contempt issue. Volume VII, Number 2, titled “The Importance of Proper APT Design and Counsel” first addressed the issue of contempt, when a poorly drafted asset protection trust resulted in the settlors’ incarceration. The new issue, published today, gives a more detailed analysis of the court’s decision in Branch Banking, and its ramifications for professionals and potential clients interested in asset protection planning.
Twenty years of highest rating
Rosen, and his law partner, Patricia Donlevy-Rosen, were recently recognized by Martindale-Hubbell for being rated “AV Preeminent®” for 20 years. “AV Preeminent®” signifies the best possible rating of legal ability and ethical standards. Less than 5% of all attorneys nationwide are awarded this honor.
What does this mean to attorney Patricia Donlevy-Rosen? She explained: “Martindale-Hubbell ratings are important because they measure how you are seen by your peers. In our practice, where a lot of our clients come from referrals, we are grateful that our peers recognize the quality of our work.” For more information on the ratings, click here: http://trustne.ws/dk5ax
AV® and AV Preeminent® are registered certification marks of Reed Elsevier Properties Inc., used under and in accordance with the Martindale-Hubbell certification procedures, standards and policies.
Link to newsletter: http://trustne.ws/5zks0
Link to full decision of Branch Banking and Trust Company v. Hamilton Greens, LLC: http://trustne.ws/6vt49
Link to full decision of Maggio v. Zeitz: http://trustne.ws/sbe96
About Donlevy-Rosen & Rosen, P.A.
Donlevy-Rosen & Rosen, P.A. is law firm with a national practice focused on asset protection planning and offshore trusts. Attorneys Howard Rosen and Patricia Donlevy-Rosen co-founded the firm in 1991, and have since become internationally recognized authorities in the field of asset protection planning. On the web: http://protectyou.com.
About Patricia Donlevy-Rosen, Esq.
Donlevy-Rosen is the author of “Asset Protection Planning,” a Tax Advisors Planning Series book published by Research Institute of America. She concentrates her practice in the protection of immovable assets such as real estate. Full bio: http://trustne.ws/pdr.
About Howard Rosen, Esq.
Rosen, an attorney and Certified Public Accountant, is the founding author of the BNA Tax Management Portfolio “Asset Protection Planning” (1994, 2002), and is considered an authority on offshore asset protection planning. Rosen was an adjunct professor at the University of Miami School of Law for twenty years. Full bio: http://trustne.ws/hdr.