Vehicles to Protect Your Assets

[bale002]

Originally Posted by thrillobyte

What you say about America becoming a third-rate country in terms of social and political developments is true. Unfortunately, America will be known for some time as the lesser of a lot of evils. With tin-cup and tin-foil dictators a dime a bushel out there putting your liquid assets in foreign countries is often playing financial Russian roulette, especially with the Justice Dept and the IRS starting to investigate these off-shore deposits of the small and middle size investors. Europe and the Euro are having their own problems and its a tossup which one of us will go down first. Zimbabwe anyone?

I know what you mean, but there are perfectly legitimate offshore trusts in English-law countries. The important thing is to declare everything and make sure everything you do is US tax compliant. That's why you need lawyers and accountants with experience in this area of tax law.

I know US businessmen who started their careers in the 1960s and 1970s when US marginal tax rates were sky high: these are among the kind of people who are still tax-shy today, whether tax dodgers or tax avoiders.

I began in the 1980s, after the mid-1980s reforms, but I spent a lot of time in Europe where the overall tax burden kills incentive. Compared to the Europe, the US has been a tax haven since the 1980s and, in relative terms, it should remain so, despite current political conditions. US persons who dodge taxes either have no international experience to compare or are completely greedy, or both. With proper knowledge and planning, there is no reason to dodge US taxes, even with a legitimate offshore trust. The people who are in trouble hid their accounts. There are IRS forms for the very purpose of legitimate offshore trusts, just fill them out and pay your taxes dutifully.

The purpose of legitimate offshore trusts, among other things, is to fence out unscrupulous people, contingency-fee lawyers, and the unpredictable US court system, not the IRS.

Again, search out an asset protection law firm in your area, do your due diligence, make sure the attorneys are experienced and offer all the tools available, not some pre-formed single-tool package to sell, and that they examine your situation on its merits, including the tax implications: red flags are a single-tool solution to all problems and promises of tax-free accounts (they should be telling you that any set of solutions is tax neutral).

All the best!

[thrillobyte]

Sound advise, bale. I take it that those who have their assets in real estate are SOL, since you can't move land offshore. It would be nice, though.

[bale002]

Originally Posted by thrillobyte

Sound advise, bale. I take it that those who have their assets in real estate are SOL ... land offshore ...

Not necessarily. There may be at least three solutions.

First, be in, or move to, a state with strong homestead protections, like Florida and Texas, which you already mentioned.

Second, short of that, or if dealing with non-homesteaded properties, when you interview asset protection attorneys, ask them if they know about equity stripping. If they don't, they lack the necessary experience and interview others.

Third - you already mentioned it - invest in properties overseas if you have some kind of comparative advantage in another country: with interest rates zero, strategically located properties in emerging economies that you may have special knowledge of may be better than money in the bank if you are willing to take a calculated risk.

All the best!

[thrillobyte]

I hate to make it seem like I'm trying mine you for info, bale, but your advice is just so good i can't resist. I've already got 2 pieces of property (SFD's--in the national average worth range) paid for in cali so I can't invest in other countries, nor would I feel competent doing so. The only thing that makes sense to me is to strip equity but, apart from reverse mortgages, which are dogs anyway, how does one "strip equity"?