State governments are colluding with billionaires to protect their wealth from taxation

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Kalena Thomhave and Chuck Collins

First of all, for the sake of your readers, we have to say that this topic – of trusts and states that serve as safe havens of trust – is deliberately complicated. The trust industry hopes that you will give up your power to understand this subject and focus on something else. Trusts are an antiquated ownership structure that has been manipulated and transformed to serve the interests of ultra-rich oligarchs and wealth hoarders. A whole industry of wealth defense industry enablers has developed to rework the fiduciary form of land ownership.

For example, the typical trust has three roles: the donor (the person who establishes the trust and invests assets in it); the Beneficiary (the person who will receive the assets or the income from the assets); and the curator, the person appointed to implement the will of the settlor and act in the interest of the beneficiary. Trust attorneys will invoke the idea of ​​a family with a disabled child establishing a trust for their care after the parents die. Historically, trust law also includes a reform called the “rule against perpetuities” to limit the life of a trust to approximately less than a century so that, in the colorful language of property law, the ” hand of the dead does not control the living.

But the wealth defense industry realized that the trust form could plunge an asset into “ownership limbo”, making it difficult, for example, for tax authorities or an aggrieved customer or divorced spouse to take legal action and receive compensation. You cannot tax or sue the settlor because they relinquished ownership of the assets and placed them in a trust. You cannot tax the beneficiary because they did not receive the funds. And the trustee is just a civil servant — it’s not their wealth.

Behold, the asset does not belong to anyone. But what if you manipulate trust law—or, as our report shows—convince a state legislature to change trust law to allow the same person to be both grantor and beneficiary (aka “the selfie trust”) or allowing a trust to live forever (a “dynasty trust”).

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