Integrated Asset Protection – Wealth Building – Tax Saving – Estate Planning
In designing integrated asset-protection and wealth-building structures, many variables must be considered. No single plan is applicable to all situations.
Knowledge of domestic and offshore legal entities, U.S. tax laws, creditor and debtor laws and offshore financial products is required to analyze a particular set of circumstances and to design appropriate strategies and plans. This office utilizes the services of experts and service providers around the world to implement optimal plans and structures for its clients. The office includes your current financial advisors, attorneys and accountants in its consultations with you if you become a client.
Business and personal assets are threatened by the risk of frivolous law suits. Income, capital gain, gift and estate taxes hinder the accumulation of wealth and then erode what has been achieved. But, advanced planning is able to provide some protections of assets against appropriation by civil courts and tax authorities. For example, selective use of business entities can insulate high-value assets from high-risk activities. State and federal exemptions to court judgments and bankruptcy exist for certain property. Life insurance and annuity products provide tax-saving investment opportunities in addition to financial security. Selective transfer of business and personal assets into appropriate offshore and domestic entities can effectively combine asset protection with wealth building and estate planning.
Utilization of available asset protection strategies, however, requires transfer of property into suitable structures before unforeseen legal or financial problems arise. If asset protection measures are not implemented long (e.g., a year or more) before an actual crisis occurs, fraudulent transfer laws could be used by a court to subvert an asset protection plan.
DYNASTY TRUSTS
A dynasty trust, also known as a GST, legacy or perpetual trust, is a flexible vehicle that can provide asset protection, wealth management and wealth accumulation for many generations, or even perpetually. In making contributions to a dynasty trust, an individual’s (or married couple’s) exemptions for gift taxes and generation-skipping taxes are utilized to insulate trust assets and distributions against gift and estate taxes forever — a good way to protect family businesses and hard-earned family wealth against punitive, profligate tax collectors. When trust assets (e.g., cash, stocks, bonds, business entities) are invested in a life insurance policy (min. premium commitment usu. $1 million), no income or capital gains taxes are paid on investment growth. Accordingly, trust assets in the life insurance wrapper can grow and be distributed to beneficiaries completely free of taxes perpetually.
In contrast to foreign PPLI, domestic PPLI requires a minimum premium commitment of $5 million or more., only in cash, and is subject to state-imposed investment restrictions. An alternative to PPLI is a foreign deferred variable annuity (DVA), which may be obtained for a minimum premium commitment of $250,000.
For the years 2011 and 2012, the individual lifetime gift and estate tax exemption is $5 million. Unfortunately, if the craven politicians of both major U.S. political parties increase estate and gift taxes (cf. Obama’s “Buffett Rule”), dynasty trusts could be eviscerated. If a dynasty trust is already established, however, it will (presumably) be protected against prospective changes in the tax laws.
For more info, check the list of articles on the ARTICLES page of this website.
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Short List of Tools and Techniques
Captive insurance companies — offshore and domestic
International and domestic asset protection trusts
International private-placement life insurance (PPLI) — min. $1 million premium commitment
International deferred variable annuity (DVA) policies — min. $250,000
U.S. tax law compliance
Limited liability companies (LLCs)
Family limited partnerships (FLPs)
Offshore private foundations
Tax-free offshore jurisdictions
Bilateral tax treaties
U.S. gift and estate tax planning
Value-discounted transfers
Value “freezing”
Currency diversification
Liability insurance (professional and personal)
Limited liability partnerships (LLPs)
U.S. bankruptcy planning
Charging order protection
Irrevocable life insurance trusts (ILITs)
Dynasty trusts — legacy trusts
Spendthrift trusts
Privacy
Expatriation
