(Offshore Asset Protection blog posted on our sister site, www.mahanylaw.com)
[Ed. Note: Our sister firm, MahanyLaw, concentrates in offshore asset protection. Because offshore asset protection and foreign tax reporting go hand-in-hand, we are reprinting this blog for our readers. Our frequent readers know we are not afraid to take a stand. This blog is no exception. Questions on any of our services can be directed to attorney Brian Mahany through this website or at the contact points at the end of the article.]
I’d like to think we are still the greatest country in the world. In many respects we probably are. But not when it comes to fiscal policy. It comes as no surprise, then that recently we have seen a large uptick in offshore asset protection.
Is this a good idea? Probably, yes.
Is it legal? Of course, if done properly.
For years, many Americans sought to place assets in other countries to evade taxes (illegal, of course) or to protect from litigation. Now, with greater global transparency, less people are trying to evade taxes. That hasn’t diminished the race to move money offshore, however.
Clients now seek to protect against future currency controls, to hedge against inflation and the weakening dollar and to have a back up plan in case the U.S. economy collapses. Is the latter far fetched? Not any more.
“Going offshore” can mean anything from simply opening a foreign bank account to complex trust arrangements. Much depends on what one wishes to accomplish.
There are pitfalls, however. Unscrupulous Internet trust promoters abound. Failing to properly report an offshore account can be a felony and can result in the forfeiture of ½ your foreign account’s highest value. An improperly set up trust can run afoul of foreign laws or not provide any protection from vexatious creditors.
One example is a client with an exotic multi-layer offshore trust. Only one problem, however. He was also the trustee of the trust. That meant a judge could order him to invade the trust to satisfy the debts of creditors.
If all this sounds daunting, it need not be. A good asset protection lawyer can navigate you through the paperwork for a few thousand dollars. Thereafter, be sure to have an accountant familiar with offshore reporting requirements. Do-it-yourself tax software probably won’t cut it.
The final step is to pay for an inexpensive annual review. A good offshore asset protection plan need not be complicated but laws are constantly changing. Make sure your plan remains legal.
MahanyLaw is a boutique law firm concentrating in asset protection. Our asset protection and estate planning lawyers can help you hold on to your hard earned money. Offshore asset protection services provided anywhere in the U.S. Our affiliate firm, Mahany & Ertl, LLC, can help with a wide range of tax and IRS matters including offshore tax reporting and participation in the current IRS offshore amnesty program (“Offshore Voluntary Disclosure Initiative”).