Technical article

How to Read a Trust's Court Record: Tested Cases Versus a Seller's Case List

In many of the cases the trust failed to stop a court from reaching the settlor.

By Neil Solomon · 4 min read

Imagine you open a law firm's page that lists 37 court decisions about offshore trusts. It looks like a record. The question behind it is a fair one: has anyone tried to break these trusts, and what happened?

The firm sells offshore planning. That does not make the list wrong. It does mean the cases were chosen by a seller, and the outcome lines come from the seller's summary rather than from the judgment. The list is a place to start reading, not a record.

What the 37 decisions show

The list is one US firm's case library (tier C). In many of the cases the trust failed to stop a court from reaching the settlor. In several of the cases the creditor still recovered little.

• In re Rensin: a judgment of US$13,400,627.60, and the creditor later distributed just over US$103,000.
• The Federal Trade Commission's case against Affordable Media, the Anderson case: a judgment of US$26,618,823 in 2000. The settlors were held in contempt and jailed for about six months in 1998. The agency's suit against the trustee settled in 2002, with about US$1.2 million turned over.
• Mastro, a US bankruptcy court in 2011: two Belize trusts were set aside as to creditors, after the settlor controlled the protector who controlled the trustee. Creditors recovered about one cent on the dollar.
• Portnoy (1996) and Fannie Mae v Heather Apartments (Minnesota, 2011): Portnoy ended with no turnover ordered, and Heather Apartments with the trust not reached.

The list still says something real. In the cases above, the courts looked past the trust to the person who controlled it.

Three kinds of source

In Tasarruf, the Privy Council let receivers be appointed over a settlor's power to revoke two Cayman trusts. It treated that power as the settlor's property. The Jersey firm Bedell Cristin says it is unclear whether Jersey would follow it. In Kea v Watson, a Jersey court held that a creditor of a beneficiary cannot attach a discretionary interest, because the interest is subject to the trust terms.

Other courts have gone the settlor's way. In 2016 the Cayman court told a trustee not to take part in English divorce proceedings, because the firewall would stop an English order from being enforced (B). In Nevada in 2017, two trusts were upheld, though support awards against the settlor himself stood (B).

Places with little on record

Some places have no reported creditor case at all. A tier C summary says no court has ruled on Wyoming's statute. Bermuda has no case on its firewall. The Dubai International Financial Centre court has given one advisory ruling, and no case tests its firewall against a creditor. An empty record is not good news or bad news. It means no one has yet shown what a court would do.

Who it touches

A settlor who wants some say in the trust. A trustee who has to decide what to do when a foreign court sends an order. Heirs, whose interests may be reached or not depending on whose creditor shows up.

If you have read a case list and wondered what it left out, what did you notice? Share it here. Someone else may be reading the same page.

Figures are estimates for planning, based on public data. Date read: October 2026.