The Bridge Trust®: A Foreign Trust Disguised for Domestic Strength — Why Its Silence Speaks Volumes

In the realm of asset protection, few structures match the elegance, strength, and quiet effectiveness of the Bridge Trust®. Over two decades of use, it has withstood creditor pressure, aggressive litigation environments, and IRS scrutiny—yet no published U.S. court has ever challenged its structure or success. This isn’t a lack of validation; it's the ultimate validation. The Bridge Trust wasn’t built to win court battles. It was built to avoid them entirely.

One of the most common misconceptions is that the Bridge Trust begins as a domestic trust and later “converts” into a foreign trust under duress. In reality, the Bridge Trust is a foreign trust from inception—domiciled and registered offshore—yet strategically structured to qualify as a domestic trust for U.S. tax purposes. This dual nature is the foundation of its strength and resilience.

WHAT IS THE BRIDGE TRUST?

The Bridge Trust® is an irrevocable, self-settled, spendthrift trust that offers the protective power of a foreign trust with the administrative simplicity of a domestic one. It is:

• Registered in Belize, a jurisdiction with robust asset protection laws.
• Structured to satisfy IRS tests under IRC §7701(a)(30)(E) (the “Court Test” and “Control Test”) for domestic tax treatment.
•  Pre-engineered to activate full foreign asset protection under Cook Islands law in the face of legal threats.

FOREIGN BY NATURE, DOMESTIC BY DESIGN

From day one, the Bridge Trust is a foreign trust. It simply complies with U.S. tax requirements for domestic classification by meeting two key criteria:

1.  Court Test – A U.S. court maintains primary supervision over the trust.
2. Control Test – A U.S. person has authority over substantial trust decisions. 

As long as both are true, the IRS treats the Bridge Trust as domestic—even though it's governed by foreign law and domiciled abroad.

NO "CONVERSION" -- JUST ACTIVATION

,The Bridge Trust does not “convert” when under legal attack. Its foreign nature remains constant. What changes is who controls the trust and where it's administered.

THE ROLE OF PROTECTOR AND THE DURESS CLAUSE

Lodmell & Lodmell, P.C., typically acting as Protector, has the exclusive authority to declare an Event of Duress, which may include:

• Legal orders to repatriate assets.
• A judgment or court action that could affect trust assets.
• Bankruptcy or similar creditor-driven proceedings.
  
  When duress is declared:
• The U.S.-based trustee (often the settlor) is removed.
• A Special Successor Trustee in the Cook Islands assumes control.
• U.S. jurisdiction is severed in favor of foreign oversight.
• The trust ceases to meet the IRS’s domestic criteria and becomes a foreign trust for tax purposes.

But no new trust is formed, and no assets are moved. The firewall was already built—this is simply the moment it activate.

WHY SILENCE IS STRENGTH: THE ABSENCE OF CASE LAW

Some practitioners seek courtroom victories as proof of a trust’s effectiveness. With the Bridge Trust, the lack of case law is not a weakness—it’s the strategy working as intended.

The Bridge Trust is structured to discourage lawsuits before they begin. Creditors and their attorneys, facing the reality of costly litigation against a well-fortified trust, often choose not to pursue the case at all.

If there’s no threat, the trust remains tax-compliant and easy to manage domestically. If a threat arises, control shifts offshore—where U.S. judgments are ineffective and repatriation is impossible.

• Typical outcomes include:
• The creditor walks away.
• The case is voluntarily dismissed or cheaply settled.
• The creditor wastes years in litigation without touching the trust.
  
  None of these scenarios result in published case law—because they don’t make it to court. Courts often attempt to force the return of offshore assets. The Bridge Trust prevents this by:
  
  
• Legally stripping the settlor of control.
• Placing assets under a foreign trustee not subject to U.S. jurisdiction.
•  Invoking the constitutional “impossibility defense.”

Judges cannot penalize someone for failing to do something they are legally unable to do.

PROVEN STRUCTURE, FULL COMPLIANCE

The Bridge Trust aligns with U.S. tax law and asset protection best practices:

• Treated as a domestic grantor trust under IRC §§671–679 when controlled domestically.
• No foreign reporting required (e.g., Forms 3520/3520-A) while domestic.
• Upon duress, it becomes a foreign trust and complies with full reporting requirements, including FBAR.
  
  Clients benefit from:
• A clear legal and tax paper trail.
•  Simple management under normal conditions.
• Maximum protection from jurisdictions like Belize and the Cook Islands when needed.

CONCLUSION

The Bridge Trust® works not by prevailing in court—but by making litigation futile. It is a foreign trust in form and law, presented as domestic until a threat arises. Then, it simply reveals its true structure.

Its success lies in what hasn’t happened:

• No court has pierced it.
• No creditor has cracked it.
• And no judge has forced repatriation.

In an unpredictable legal landscape, the Bridge Trust® offers certainty—a proactive, silent, and sophisticated deterrent designed to protect wealth before trouble starts.

For more details about the Bridge Trust®, see this article.

Lodmell & Lodmell, PC is one of the nations leading Asset Protection Law Firms and the creators of The Bridge Trust®.  L&L serves clients nationwide and may be reached at [e-mail] or 602-230-2014.