Asset Protection Using Irrevocable Trusts

In 2002, Client commenced operations in a risky business with heavy government regulation and a potential for significant fines and penalties.  In 2003, Client transferred a home and cash in the amount of $2,800,000 to an irrevocable self-settled Nevada trust.  In 2007, Client was fined $4,000,000 by a government agency.  In a deposition, the client disclosed the existence of the trust and its assets to the government agency.  Client offered to settle the case for $100,000 and a promise to cease and desist the activities that resulted in the fine.  The government agency accepted the settlement and informally acknowledged that the chances of recovering assets from a pre-existing irrevocable trust were remote, and that this was a significant factor in their decision to accept the settlement offer.