HOW TO LEGALLY PROTECT YOUR ASSETS
TABLE OF CONTENTS
INTRODUCTION
WHAT YOU WILL LEARN
HOW TO USE THIS BOOK
SECTION ONE:
THE BASICS OF ASSET PROTECTION
PLANNING & WEALTH PRESERVATION:
PLANNING STARTS AT HOME
CHAPTER ONE
Why Asset Protection Planning?
First Financial Battle: Making Money
Second Financial Battle: Keeping the Money
Litigation Gone Wild
Relationships Change
Moving Offshore
Loss of Privacy
Too Many Laws
FBI & the Internet
Forfeiture of Property Rights
Heavy Taxation
Limitations on Insurance
Protect Your Assets
Your Legal Right
Worth Repeating
Understand Your Rights
Understand the Concepts
Plan Ahead
Asset Protection Goals
Section Previews
Synergy
CHAPTER TWO
Taxes & Wealth Preservation
Tax Evasion & You
Tax Neutral Planning
Freedom from Taxes?
Tax Burdens
The Biggest Insult
Hello Slave
Avoiding Taxes
Solid Tax Planning
Where do You Call Home?
The IRS Audit
CHAPTER THREE
Discouraging Lawsuits
Principals
Egos
Seek Win-Win Resolutions
Straws of Justice
Avoid the Courtroom
Remain Likable
Remain Low Key
Life to the Fullest
Playing Hardball
CHAPTER FOUR
Personal Guarantees & Debt
Pitfalls
Fiction
Creating Flexibility
Look for Options
Stay Positive
Subleasing
Resolving Troubled Loans
Turn Losses Into Profits
Use Debt Wisely
CHAPTER FIVE
Personal Relationships & Your Wealth
How Personal Relationships Can
Destroy Your Wealth Accumulation
Disposable Society
Living Together
Doctrine of Unjust Enrichment
Cohabitation Agreements
Common Law Marriage
The War
Cohabitation Agreements In Action
Justice is Slow
Prenuptial Agreements
The Forever Bride
Expert Advise
The Candidates
All is Fair
CHAPTER SIX
Owning Property With Others
Tenancy in Common
Joint Tenancy
Tenancy by the Entireties
Homestead Exemptions
Business Relationships
Joint Tenancy Agreements
Seniors & Synergy
The Trial
Put it in Writing
CHAPTER SEVEN
Business Structures
Separate Business Entities
The Exposure
Limitations on Insurance
The Court’s Position
Protection from Personal Liability
The C-Corp & S-Corps.
Family Limited Partnerships
The LLC
Series LLC
The Goal: Liability Protection
Using Multiple Entities
Diversify Business Structures
Multiple Business Owners
Employment Agreements
Shareholder Buy-Sell Agreements
Litigation
Equal Partners
Avoid Spousal Partners
Act Now
CHAPTER EIGHT
Surviving the Financial Crisis
Financial Setbacks
U.S. Bankruptcy
Leveling the Playing Field
Alternatives to Bankruptcy
Sell Yourself
Seek Alternatives
Bankruptcy Planning
U.S. State Exemptions
U.S. Homestead Exemptions
ERISA & Annuities
A Stateside Haven?
How Planning Can Work
The Rules
CHAPTER NINE
FLPs, LLCs & Asset Protection Planning
Family Limited Partnerships
Flexible Planning Tool
Gift Tax Benefits
How FLP Gifting Works
Asset Types
Technical Issues
The LLC Today
Single Member LLC
LLC & Asset Protection
Charging Order Protection
Managing the LLC
Asset Protection Using an LLC & a Trust
SECTION TWO:
PROTECTING ASSETS FROM NATURAL EVENTS:
THE AGING & DEATH SIDE
OF ASSET PROTECTION PLANNING
CHAPTER TEN
Assets of The Elderly
Long Term Care Insurance
Private Pay
Medicare
Medicaid
Medicaid Qualifying Trusts
Options to Qualify
Medicaid Annuities
Disability Trusts & Special Need Trusts
Plan Ahead to Qualify
CHAPTER ELEVEN
Disabilities & Your Assets
The Tragedy
Durable Power of Attorneys
Healthy Reasons
Short Term Disabilities
Living Wills
Painful Consequences
Plan Ahead
CHAPTER TWELVE
Death & Wealth Preservation
Living Forever?
Integrated Asset Protection Planning
Who Gets What?
Avoiding Taxes
Think Family
Consulting with the Pros
When Death Strikes
Avoiding Family Conflicts
Planning Goals
Anti-Contest Provisions
Avoiding Probate
Privacy
Living Trusts & Pour-Over Wills
Basic Estate Planning
Death & Taxes
Tax Relief?
No Unemployed Estate Planners
Marital By-Pass Trust
Q-Tips
Grits & Qprts
Holographic Wills
Funding Estate Plans
Spendthrift Provisions
Discretionary Provisions
Motivating Your Heirs
Setting Goals
Beneficiary Designations
Other Tools
The “Forever Trust”
Generation Skipping
Trusts & More Trusts
More Options for Reducing Estate Taxes
Act Today
CHAPTER THIRTEEN
Life Insurance Eroding Your Wealth
Life Insurance & Tax Burdens
Eliminating Insurance Tax Burdens
Irrevocable Life Insurance Trusts
And Yes, More Trusts
Annuities
Think Synergy
CHAPTER FOURTEEN
Giving to Preserve
Complete or Incomplete
Avoiding Gift Taxes
Gifting to Children
Controlling the Gifts
Wealth Preservation & Gifts
Seeds of Growth
Setting Goals & Acting Now
Going Offshore
SECTION THREE
INTERNATIONAL ASSET PROTECTION:
GOING OFFSHORE
CHAPTER FIFTEEN
Offshore Planning Options & Why
Litigation Gone Crazy
Search for Low Cost Resolutions
Level the Playing Field
Stacking Up Asset Protection Choices
Comparing Domestic vs. International Asset Protection
Seeking Alternatives
Your Choice
Your Legal Right to Protect Assets
Think Synergy
Going International
The Beginning
The International Trust
Offshore Myth #1
Offshore Myth #2
Offshore Myth #3
Offshore Myth #4
Offshore Myth #5
Offshore Myth #6
CHAPTER SIXTEEN
The Structure For International Trusts
The Components of an International Trust
The Settlor
The Protector
The Trustees
The Trust
The Beneficiaries
Ancillary Estate Planning
LLC Ownership Interests
Avoiding Fraudulent Transfers
Legitimate Transfers
Timing
Integrated Asset Protection Planning
Controlling Your Assets
The Basic International Trust Structure
Beyond U.S. Court Jurisdiction
Documentation & Formalities
Summary
CHAPTER SEVENTEEN
The International Trust & Litigation
Untouchable Assets
Negotiating from a Position of Strength
The Anderson Case & The Lesson of Control
Bad Facts-Good Results?
The Lawrence Case & The Lesson of Truth
Control or Not to Control
Anti-Duress Clauses
Doctrine of Impossibility
Extraordinary Measures
Relocating Your Trust
Yes, International Trusts Work!
CHAPTER EIGHTEEN
The Right Trustee in the Right Jurisdiction
Who is Your Trustee?
Avoiding U.S. & Homeland Pressure
Avoiding Enforcements of U.S. Judgments
Pro-Active Trust Law
Avoid Special Promoters
Other Factors
Protective Laws Within Jurisdictions
Selected Jurisdictions
Dealing with the Trust Company
Dealing with the Catastrophe
The Bottom Line
CHAPTER NINETEEN
Putting the Pieces Together
Segregating Assets
The Goal
The Plan
The Result
How it Works
Integrated Planning
Planning Ahead
Creative Structuring
The Offshore LLC & IBC
Reporting Requirements
Cover Thy Assets
CHAPTER TWENTY
Offshore Banking
The New World Order
Whose Your Offshore Banker?
Income Tax Evasion
Politics of Offshore Banking
CHAPTER TWENTY ONE
Living Overseas, Second Passports & Expatriation
Is Offshore Legal?
Offshore Risk Management
Residency & Citizenship
Foreign Earned Income Exclusions
Dual Citizenship & Passports
America’s Exit Tax & Expatriation
Backward Thinking & Prohibitions
People & Money Go Where Treated Best
CHAPTER TWENTY TWO
Pre-Migration Planning & The No Tax Traveler
Resolving International Tax Issues
Not All Tax Law is Created Equal
New Zealand & Australian Examples
Part Time Visitor Alternative
The No Tax Traveler
Pre-Migration Summary
Seeking Safety
CHAPTER TWENTY THREE
Offshore Insurance & Wealth Preservation
Domestic vs. Offshore Insurance
Selected Jurisdictions
Offshore Benefits
Offshore Tax Saving Platforms
Captive Insurance Companies
Beyond Asset Protection Planning
CHAPTER TWENTY FOUR
The Last Word
Land Trusts
Sham Trusts
Private Trust Companies
Asset Protection Guarantees
Confidential
Recoverable Information
Privileged Communications and Confidentiality
Telephone Calls
Tape Recordings
Faxes & Emails
Mail
Computer Security
Social Security Numbers
Privacy
Now You Have it
Synergy
Plan Offensively
Integrated Planning
One Size Does Not Fit All
Think International
Confidentiality
Act Now!
HOW TO CONTACT US
CORRESPONDENCE OFFICES
APPENDIX “A”
Domestic Grantor Trusts for U.S. Tax Purposes
Foreign Trusts for U.S. Tax Purposes
Domestic LLC
Foreign LLC
Domestic Corporations
Foreign Corporation
Foreign Bank or Investment Accounts
Miscellaneous
Index
INTRODUCTION
When I first decided to write a book on asset protection in the late 1990s, it was written for Americans, and there were no other books on the market that provided technical guidance on the topic. What limited information was available to the general public was often simplistic or overly complex. The first edition of this book in 2000 was simply an attempt to categorize the many topics that fell under the concept of asset protection, and explain them in simple, easy-to-understand terms for the layperson.
Today - more than a decade later - there is little additional good information available on the topic of asset protection, yet the litigation frenzy continues to spread throughout Western society. Some of the books and articles are written by members of the profession I respect and I find useful, and others are not. After the first edition was published, it seemed that many bookstore shelves became stocked by other authors whose sole objectives were for marketing purposes. To the contrary, this book was first written after I “retired” without any motivation towards marketing, and new client engagements were repeatedly declined. It was only after I “flunked” retirement (as my wife tells it) that I decided to return to working with clients and professionals in this area of concentration which I enjoy.
It is true today that asset protection is more complicated than a decade ago, and certainly more so than when I first started. But the mission of this second edition remains the same as the first, and that is to tell the story of asset protection in simple, easy to understand terms .... with a considerable amount of updating and an eye towards a spreading Western cultural problem attacking wealth that is no longer unique to the U.S.
Importantly, this book is about you.
WHAT YOU WILL LEARN
This book is designed for you if you are serious in learning about the many different aspects of asset protection. Some of those aspects are legal, and others are based upon pure common sense. In either case, you will discover the many legal and non-legal techniques available to protect and preserve your hard-earned money and property.
Asset protection is about knowing and understanding the many tools available to you and how to successfully use them every day to your benefit. This book is about both domestic asset protection planning, and also the best options available if you are interested in going international, or what’s often referred to as “going offshore.” Wherever you live, everywhere else is offshore.
You will discover that asset protection planning is more than just transferring assets - or secrecy - or setting up trusts. And it is certainly more than choosing between domestic or offshore planning. It includes both the life side and the aging and death side of protecting and preserving family assets.
You will learn that true asset protection planning integrates both domestic and offshore worlds, is the daily use of local laws and planning techniques, and combines many different tools together for the best asset protection planning. Real asset protection is a “holistic” approach. This means that you should plan the parts consistent with the big picture in mind.
Asset protection and wealth preservation are designed to level the playing field in a world of plaintiff hungry lawyers and greedy sharks that are out to get a chunk of your assets. When litigation begins, you can never have enough protection to preserve what you have worked a lifetime to protect. Assets intended for a comfortable retirement or for your heirs can quickly disappear. There is nothing worse than witnessing someone who has worked endlessly for financial security and independence just to lose it all overnight.... especially when that someone is you.
You will receive a wealth of information from this book. Protecting and preserving your assets is your legal right. Don’t feel guilty about using these important legal techniques. What you do with your assets - short of defrauding others - is your choice. By doing nothing, you choose to expose your money and property to whoever desires to take it from you. Instead, by taking action today, well in advance of problems or claims against you or your property, you can protect and preserve your hard-earned money and assets.
So read this book carefully, and you will be among those who have learned to protect and preserve their assets.
For the first time, a complete guide to all of the different asset protection tools contained under one cover. Many successful people are using many of these techniques today to protect their assets. You can too.
HOW TO USE THIS BOOK
This book is divided into three parts. You will learn how the smart and the wealthy (not always one and the same) use domestic and offshore asset preservation to protect their assets.
Learn from Section One The Basics of Asset Protection Planning and Wealth Preservation - Planning Starts at Home. This section is designed to give you an introduction and overview to matters of common sense, as well as domestic legal tools for everyday living, whether in your personal or business relationships. You may be familiar with some of these tools, but you will also be introduced to many new techniques and how to best apply them for wealth preservation.
Discover from Section Two Protecting Assets From Natural Events - The Aging & Death Side of Asset Protection. This segment of the book is an attempt to provide you with an overview of how to plan for the aging and death side of asset preservation, such as disabilities and inevitably, death. These techniques are important to integrate into asset protection planning. And this is essential if you are serious about dealing with some of the inevitable natural disasters that life can bring your way.
One of the most exciting parts of this book is International Asset Protection - Going Offshore found in Section Three. This section - the life side of asset protection - has been significantly expanded in this second edition. There are fresh, new international concepts that have arrived on the scene since the first edition was written. The first two segments of the book lay the framework for the third section, however, it can be read on its own if you are already knowledgeable on the early topics. This third segment takes a closer look at some of the best offshore preservation tools available to you today.
Importantly, the third part of the book integrates domestic legal techniques with international planning tools to gain the best advantage available for asset protection and wealth preservation. This section is particularly applicable not only for Americans looking to protect what they own, but for those building wealth in other Western countries.
Learn about synergy. The concept of using tools and techniques together is an important part of this book. Think of synergy as the single acorn that grew the mighty oak. An advanced and aggressive level of asset protection planning is not only perfectly legal, but as you will see, being without these techniques leaves you naively vulnerable in a world where wealth accumulation is often lost much quicker than it is created.
For the first time, a complete guide is now available on asset protection planning designed for the layperson. However, professionals acting in the discipline of law, accounting and asset management will find it a useful aid in providing domestic and offshore planning information to their clients.
Now you, too, can take serious steps to protect what you have worked long and hard for. Instead of waiting until you are confronted with a serious problem, begin today to protect those assets.
The key to asset protection planning and wealth preservation - domestic or offshore - is to be proactive, if you are truly serious about protecting and preserving your money and property. Most importantly, start now.
Best regards,
David A. Tanzer,