An asset protection scam being touted by scammers is known as the Pure Trust scam. This scam involves a nonexistent form of trust and, while attempting to keep one step ahead of the authorities, operates under a variety of aliases which include Constitutional Trust, Patriot Trust, Common Law Trust, Business Trust, Common Law Trust Organization (COLATO), Foreign Common Law Trust Organization (FOCOLATO), and a number of other names

While the scam artists who push these Pure Trusts have a lot of great reasons as to why you should vanquish your creditors, the truth is that Pure Trusts are easily shot down by creditors in a number of ways, including that a Pure Trusts is nothing more then a "self-settled spendthrift trusts" (expressly disallowed by all but a few states), that they have illegal intent (i.e., tax evasion), that they are a scam, and that any transfers to the trusts are fraudulent conveyances.

Pure Trusts are often part of a three-tier trust structure, which allegedly hide the existence of the trust while making the structure tax free. In reality, however, it does nothing more except make it seem like the structure is worth the cost - which it isn’t.

On top of everything else, the IRS chases after Pure Trusts like a cat chases after a mouse. The IRS has never lost a case against the Pure Trust and is aware that it can easily grab the assets to satisfy taxes, interests, and the heavy penalties awarded by the court. In brief, a Pure Trust is absolutely useless.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.