A recent U.S. Bankruptcy Court decision, 111 re Huber,’ held that an Alaska self-settled trust essentially was invalid with respect to claims of the settlor’s creditors in bankruptcy. The case doesn’t appear to break new ground and, in some ways, seems flawed. However, it’s important to review the decision to help determine how best to protect assets using a self-settled trust. In any case, the ruling doesn’t seem to thwart using a self-settled trust to keep assets from being included in the gross estate of the settlor for federal estate tax purposes.
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