Ukraine is a war we can’t ignore. It could a take generation of political powers to overcome.
But still, Russia and Ukraine are only small parts of the much bigger picture that cannot be ignored. Not just the bigger picture of powers growing and powers waning, but of social and economic impacts to the way of life for us, our children, and grandchildren for many years ahead.
Read on to see why. And learn what steps you can take to protect your assets in a world full of changes, if you can stomach what’s ahead.
First, Why is Ukraine Important?
Nearing the end of World War II, in 1945 the Bretton Woods agreement redefined the new social order, political boundaries, economies, the banking system, and our way of life, for the next two generations.
In 1991, the USA stood unchallenged. The Cold War was over, the Berlin Wall had come down, and the red flag of the Soviet Union was removed in Moscow. Some claimed it was the end of history and a triumph of liberal democracy under a new era of democracy, worldwide.
Russia was humbled, and China was expected to accept the inevitability of democracy. But thereafter, the U.S. moved troops from region to region but was accused of never sticking around, or winning a fight.
Since 1991, all American Presidents lost opportunities to keep Russia in check. Following 2016, the Trump presidency exploited the worst of America, trashed alliances, and made friends with despots, but this was merely a symptom of an already poisonous system. But Trump was the first president to publicly state the EU should pay for their own defense - including NATO - and not the U.S..
One looming problem is that the last 30 years have been a persistent erosion of American power and prestige, and America is a nation in search of its soul and a moral purpose. Biden’s exit of Afghanistan left images of troops and helicopters leaving the country that resembled the fall of Saigon.
Another larger problem is that no leader in the Western World has been able to overcome the drift away from the American Dream, and the inequality has grown like an open wound.
Now, Russia has sent an open invitation to China to move on its threats to take over Taiwan, and flex its muscle throughout the South Pacific and Southeast Asia. Nine-digit lines, militarization on small reefs and islands across the South Pacific, and China’s $900 Billion Silk Road initiative, have all been well-established for much greater power control than what currently exists.
The United States is still the most powerful military in the world. The world looks to America, but that’s also another part of the big problem: the world has become too dependent on America for its own security. But how can a country be strong externally when it’s weak internally?
Right now, the resolve of the Western World – not just America’s resolve - is more crucial than ever. But all we see is the sunset of the American century giving way to Russia and China, and other authoritative regimes.
Putin and Xi sense their moment in the big picture. A changing world order is inevitable.
What does a Changing World Order Mean in Dollars & Cents?
History is changing fast. The questions are endless.
How far will Russia expand? Will NATO and the EU step up to defend Europe? How long and how much money will it take? Will America repeat a Normandy invasion spilling the blood of its sons and daughters and take on more debt, and increase taxes to support the initiative? Could NATO and Europe look to expand its influence Eastward? Will China support Russia, remain neutral, or accelerate its own global ambitions? Will Iran seize the moment to take advantage of greater regional interests? Does America and the Western World stand idly by and allow events to just unfold? How far is far enough?
The answers are even more complex.
Think about the big picture, beginning in the 1930s leading up to WWII, and taking hold in Bretton Woods in 1945. Step away from the details and images of Russian and Chinese assertiveness. Ignore, if you can, the precise steps and exact details and how events play out. Wars never go to plan, and are an ongoing work in progress once started, and usually much worse than imagined.
It’s impossible to predict, but we are now on the brink of finding out as world history unfolds, again.
Consider that all empires, great and small, always - yes, always - rise and fall. Wars are not won by peaceful means, but by bullets, bombs, and death until capitulation is made by the loser.
During such power upheavals the landscape of the dominating currency, trade norms and laws, economics, and even technology can be drastic and unpredictable. Rationing, wage, price, import/export controls, and takeover of central banks, are all predictable consequences. The strong dominate the weak. Not only global, but regional and local geopolitical disputes worsen into desperate financial times. Trust, loyalty and cooperation are nil.
Almost always, personal and business assets are frozen or ceased. And capital markets are broken. Currencies become useless and generally replaced. Governments – new and old – need cash from somewhere, everywhere, to survive.
You think these scenarios are ominous? Impossible? History says it’s the norm.
During World War II, in the U.S., UK, Germany, and Japan all experienced degrees of market closures, asset and market price controls, asset ownership restrictions, domestic and foreign market currency controls, increases in top marginal tax rates, and limits on personal and business income and profits.
It is also predictable that considerable wealth in all forms and types of personal assets will be lost.
And protecting your assets during such unpredictable times is very difficult because typical economic channels are restricted, if not closed. And traditional ‘safe investments’ are not safe as capital mobility is restricted.
Protecting assets becomes insignificant when there becomes a need to redistribute wealth to others, or into the hands of government coffers.
How to Legally Protect Your Assets?
I have long advocated the need and importance of protecting assets from threats of risk, of all types. I have argued for what appears to be an eternity that having flexible planning in place to quickly move assets from jurisdiction to jurisdiction is essential. And that placing all your eggs in one domestic venue is very risky.
But now, more than ever, the need to have flexible planning in place to quickly move assets is more important than ever before.
It's too late when everyone rushes to the exit at the same time. And hope is not a plan.
By comparison, in the lead up to WWII, those with any measurable personal assets to protect took steps well in advance of conflicts to place their assets in trusts and venues that made it difficult or impossible to reach. The smart ones that took advance planning steps made out financially superior following the end of the war than those that didn’t.
As a student of history, it’s for the above reasons I first authored How to Legally Protect Your Assets, which was later updated to the second edition.
And then, the same occurred when I next authored Offshore Living and Investing, also updated to the second edition.
Whether you agree or disagree with what the current events mean today, you cannot disagree that big changes lay ahead. Are you willing to take the risk and do nothing?
For these reasons, asset protection and risk management are essential to preserve assets. And a Standby International Trust©, or an International Trust, are superior planning tools to start protecting assets from risks.
Why trusts?
The trusts we provide for our clients are generally integrated with asset protection, retirement planning, and estate planning. This means that the life and death sides are integrated as part of the overall planning. But there are significant differences between the Standby International Trust© and the International Trust.
A Standby International Trust© is a domestic trust with a standby provision that allows you to elect to add an additional trustee later in any jurisdiction, anywhere in the world. There is no foreign trustee registered outside the U.S. when the trust is first established.
In the future, when a risk materializes, you can register the trust in a more favorable asset protective jurisdiction. The trust would then have the full international asset protection benefits provided for in the trust, and in the jurisdiction where it is then registered.
In the meantime, you avoid annual foreign trustee fees and burdensome foreign compliance requirements.
And when you first establish the trust, you can use either a personal trustee of your choosing, or alternatively, a corporate trustee that we set up for you. In both cases they would be located in the U.S.
A benefit of a personal trustee is no trustee fees, and it's someone that knows you and your family. The benefit of a corporate trustee is that they are typically more experienced and routinely handle complex matters.
From the onset, the Standby International Trust© is implemented as a U.S. domestic trust, and not a foreign trust. And a U.S. domestic trust is tax neutral. All asset-generated income and expenses pass through the trust to your personal tax return.
So what happens after the standby election is made and completed?
The International Trust. This trust is also generally created and implemented as a U.S. domestic trust. It can be established one of two ways: 1) Designed and implemented from the beginning as an International Trust, or 2) After the standby election is completed in the Standby International Trust©.
If, and when, a standby election is made to convert the trust to an International Trust the trust can (and usually does) continue as a U.S. domestic trust even after the additional trustee is added from a foreign jurisdiction.
As discussed in earlier newsletters, the International Trust offers significantly superior asset protection and planning not found at home.
Bring Some Certainty into Your World
Are you thinking for yourself? Or are you following the crowd? Do you understand how international planning and International Trusts can benefit you and your family?
There are approximately 100 complimentary past articles at our website that provide basic principles and tips for protecting your assets. Look closer at what international planning means. How to protect assets in a changing world. Learn more about offshore risk management, how offshore is legal, and much more.
Asset protection planning - whether at home or abroad - provides a superior alternative for protecting a lifetime of achievement. An International Trust and a Standby International Trust© are two excellent examples for managing assets, global protection, and asset diversification.
As a former litigation attorney and judge, for the past forty years I witnessed how fortunes were quickly won and lost. Asset protection designed and implemented with an eye towards future challenges is essential. Threats come from all directions: litigation, divorce, partnership disputes, social unrest, government controls, and elsewhere.
For most individuals it’s all about asset protection, wealth preservation and estate planning. For others: retirement and security. For some: opening doors to international investing, foreign currencies, offshore banking, and global diversification. And for others, it’s about keeping open the option for offshore living & investing, full or part-time.
For an increasing number, it’s about safety, security, and leaving behind America’s burdens. Or becoming a sovereign individual. And for the smart ones, a way to survive.
Integrated planning is an important component of the planning process to combine estate planning and protecting assets. Minimizing estate taxes, providing for surviving spouse or children, keeping assets from a re-marriage - or second marriage children - are a few of the objectives when integrating estate planning into a structure.
The freedom to choose can be found without leaving home by combining domestic and offshore planning. Learn to reopen the door to greater opportunities.
Your world will continue to change in unexpected, and seemly random ways. Yet, there are ways to retain some certainty and control over your assets in a random, chaotic world.
Start Now.
There are more International Trust and Standby International Trust© tips found on our site.
The book How to Legally Protect Your Assets, 2nd edition, explains how you can use an International Trust to accomplish your objectives. And information on the Standby International Trust© can be found on our site, too.
Offshore Living & Investing, 2nd edition, takes offshore planning to another level.
Both books are available at reduced prices at our web site in quality soft cover, pdf, or Kindle.
If you’d like to learn more and discuss your planning objectives in a confidential initial review, contact me to schedule a call.
Until next time …
David