[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.''.
                                 <all>