Billionaire's Loophole Elimination Act - Amends Federal bankruptcy law to permit the bankruptcy trustee to avoid a transfer to an asset protection trust of an interest of the debtor in property made within ten years before filing of the bankruptcy petition, if the transfer amount (or the aggregate amount of all transfers to the trust within the ten-year period) exceeds $125,000, to the extent that the debtor's beneficial interest in the trust does not become property of the estate because of a restriction enforceable under applicable nonbankruptcy law (because it is income from a spendthrift trust reasonably necessary for the support of debtor and dependents).
Defines asset protection trust as one settled by the debtor, in which the debtor has a direct or indirect beneficial interest or under which the trustee may distribute property to or for the benefit of the debtor, and as to which a restriction on the voluntary or involuntary transfer of the debtor's beneficial interest in the trust is enforceable under applicable nonbankruptcy law.
Excludes from the meaning of asset protection trust: (1) specified retirement funds, (2) charitable trusts; and (3) certain educational trust, funds, or accounts.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1278 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 1278
To amend title 11 of the United States Code to limit the exemption for
asset protection trusts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 14, 2005
Mr. Emanuel (for himself, Mr. Delahunt, Mr. Watt, and Mr. Conyers)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To amend title 11 of the United States Code to limit the exemption for
asset protection trusts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Billionaire's Loophole Elimination
Act''.
SEC. 2. ASSET PROTECTION TRUSTS.
Section 548 of title 11, United States Code, is amended by adding
at the end the following:
``(e)(1) The trustee may avoid a transfer of an interest of the
debtor in property made by an individual debtor within 10 years before
the date of the filing of the petition to an asset protection trust if
the amount of the transfer or the aggregate amount of all transfers to
the asset protection trust within such 10-year period exceeds $125,000,
to the extent that the debtor's beneficial interest in the trust does
not become property of the estate by reason of section 541(c)(2).
``(2) An asset protection trust is a trust settled by the debtor,
in which the debtor has a direct or indirect beneficial interest or
under which the trustee may distribute property to or for the benefit
of the debtor, and as to which a restriction on the voluntary or
involuntary transfer of the debtor's beneficial interest in the trust
is enforceable under applicable nonbankruptcy law. For purposes of this
subsection, the following are not asset protection trusts:
``(A) Retirement funds to the extent that those funds are
in a fund or account that is exempt from taxation under section
401, 403, 408, 408A, 414, 457, or 501(a) of the Internal
Revenue Code of 1986.
``(B) Charitable trusts.
``(C) Qualified trusts under section 529 of the Internal
Revenue Code of 1986, and other educational trusts, funds, or
accounts.''.
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Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
Referred to the Subcommittee on Commercial and Administrative Law.
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