London court rules that trusts created by former Russian senator were created to avoid creditors.
A court in London has determined that the trusts created by former Russian senator Sergey Pugachev were fraudulent and set up to hide the fact Pugachev still controls the assets he allegedly took from the bank he formerly owned, according to the Russian Legal Information Agency in "London court declares trusts of ex-Russian senator Pugachev sham."
Pugachev used to be an elected Russian senator who owned a large bank. The bank was declared bankrupt in 2010 and an investigation was launched to determine if there had been any criminal activity.
Pugachev fled the country and was eventually accused of embezzling millions from the bank. However, he claimed to have very few assets. He even sued the Russian government in European courts demanding that he be compensated for billions of dollars in assets that Russia had allegedly taken from him.
This illustrates a key point in trust law, although the specifics are different in every jurisdiction.
Trusts designed to hide assets from known creditors, especially for criminal purposes, will not be allowed.
While a trust can be a great way to protect assets from future creditors, it is not something that can be used to avoid paying current debt.
A trust also will not protect assets obtained through criminal means.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include a trust. Contact us today for a consultation. You can also hear what some of our clients are saying about us here.
Reference: Russian Legal Information Agency (Oct. 11, 2017) "London court declares trusts of ex-Russian senator Pugachev sham."