When correctly written, executed, and funded, the irrevocable trust will protect Mr. Bieber's assets and I believe this will deter many of these frivolous lawsuits if not stop them altogether.
Boston, MA (PRWEB) February 07, 2013
According to CBSNews.com, on Jan 10, 2012, Justin Bieber received a lawsuit from his former bodyguard claiming more than $420,000 in lost wages and that he was repeatedly hit in the chest during an argument on how to manage a member of Bieber's entourage could potentially leave his estate and assets in jeopardy claims Rocco Beatrice, Managing Director of Estate Street Partners, founders of the UltraTrust irrevocable trust. Mr. Bieber, though only 18 years old, is reportedly to be worth $110 million with 33M followers on Twitter and 51M Facebook likes.
"Mr. Bieber has had a string of frivolous lawsuits in the past year from an Oregon woman who was suing him for hearing damages at a concert to the Twitter prank where he tweeted a phone number that caused a flood of calls to two Texas residents. As his popularity and net worth increase he may endure many more of these lawsuits," claims Rocco Beatrice.
"Though he is a Canadian citizen and the laws concerning irrevocable grantor trusts and asset protection will differ ever so slightly from rules in America, he is still in need of protecting his assets located in the United States because they are at the whim and discretion of the U.S. Court system and U.S. judges," advises Mr. Beatrice.
According to public filings, Mr. Bieber owns little real estate in the U.S. He owns property in Watsontown, PA valued at $17,275 and residences in Peoria, AZ worth $310,000 and another in Muncy, PA priced at $289,000. This seems nominal compared to other American celebrities who have homes valued in the millions; however, these are not his only assets based in the U.S. that may be subject to creditors.
Braun, also known as Scooter, Justin Bieber’s manager, says Justin invests around 2% to 5% of his net worth to venture capital start-ups. Featured in a Forbes Exposé in 2012, these start-ups, all based in the U.S., include Spotify, Tinychat (a messaging platform), A-Grade, Stamped (an app that allows users to rate places and music), and social gaming company Sojo Studio’s. By deduction, if his net worth is valued at $110M then this would equate to $2.2M to $5.5M of investments in start-ups.
“We can only conjecture where Mr. Bieber has placed the rest of his assets but if they are in America then his assets are still open to attacks by a lawsuit in the U.S. And this is why he should have an irrevocable trust,” states Rocco.
A properly written, executed, and funded irrevocable trust is where one can hold assets. These assets are a property of the trust, not the individual who placed them there. The assets are controlled by a trustee in accordance with the written rules of the trust.
Once an individual correctly places assets in the irrevocable trust, the individual does not own the assets anymore; the trust does. This keeps the assets protected from anyone trying to collect them from an individual (although sometimes there is a 60 month look-back period in cases of a Medicaid look-back) because a creditor can’t collect something that the debtor doesn’t own. Assets in an irrevocable trust are safe for future generations.
"God forbid though that Mr. Bieber should ever use a revocable trust," advises Rocco.
The irrevocable trust should not be confused with a Revocable Trust. The revocable trust allows the creator of the trust document to change the document at will and places too much control with the grantor resulting in an unprotected estate.
Without an irrevocable trust, Mr. Bieber can be made more susceptible to US-based frivolous lawsuits through many different “jurisdiction” rules. The first being the long held rule of “in personam jurisdiction.” When Mr. Bieber sets foot in any given state, if he can be served while being there, he can be sued in that state [see Pennoyer v. Neff, 95 U.S. 714 (1878)].
Mr. Bieber could, if he chose, avoid those states where he might be taken to court, but he still would not be able to avoid the frivolous lawsuits. Several cases, such as Hess v. Pawlowski, 274 US 352, (1927), International Shoe Co. v. Washington, 326 U.S. 310 (1945), Gray v. American Radiator, 176 N.E.2d 761 (1961) and Burger King Corp. v Rudzewicz, 471 U.S. 462 (1985) combined to expand the test for jurisdiction to include states in which a person has availed themselves to doing business in the state by having minimum contacts.
Mr. Bieber does business in the U.S. and has more than the required “minimum contacts” needed to give US and state courts jurisdiction over him. Estate Street Partners is very confident that Mr. Bieber could be compelled to come to a courthouse in almost any state of the United States.
"Because Mr. Bieber is so vulnerable to frivolous lawsuits his assets should be placed in an irrevocable trust such as the UltraTrust. This strategy will greatly improve the protection of his hard earned money and assets. When correctly written, executed, and funded, the irrevocable trust will protect Mr. Bieber's assets and I believe this will deter many of these frivolous lawsuits if not stop them altogether."
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