Many argue that the United States is gearing up for the second civil war. Some believe it has already begun. The opinions on the outcome are as different as red and blue. And if Covid and China aren’t already enough, whatever or whenever it occurs, there will be profound changes in the coming days.
Forward looking individuals are concerned not just about the politics, but more importantly about keeping their assets safe. The only thing anyone knows for certain is that having standby options – a Plan B – is important to protect their hard-earned assets from the fallout.
A discussed in more detail below, a Standby International Trust fits into the planning.
But first, does the US need another civil war? Will it really happen? Has it already started?
The First America Civil War
Between 1861 and 1865 the American Civil War was fought between the Union (mostly northern states) and the Confederacy (mostly southern states). The central cause of the war was about slavery, but especially the expansion of slavery into territories acquired by the Louisiana Purchase and the Mexican–American War.
Until recently, the Civil War still remained the deadliest military conflict in American history. It was only following WWI, WWII, and the Vietnam War combined, that the total number of American deaths in all foreign wars passed the number who died in the Civil War. In total, upwards of nearly 750,000 Americans died on American soil during the first American Civil War.
Like all conflicts, the lead up to wars are complex and bubble up over time. Pre-1861, slavery, abolitionists, territorial disputes, states’ rights, sectionalism, and protectionism contributed to discontent. Nationalism and one’s honor were also a very powerful driving force. Combined, these lead up to the outbreak of war on American soil. Americans shooting and killing Americans.
But the election of President Abraham Lincoln was the final tipping point, and lines and arms were finally drawn.
The Second American War is Brewing
A shocking 83% of Americans of all political persuasions are worried about the future of democracy in the United States following the January 6, 2021 Capitol riot. The vast majority are very worried about their future, according to a survey recently published by the USA Today and Suffolk University.
Concern for the future of American democracy is evenly distributed across both red and blue parties, with 82% of Democrats and 86% of Republicans expressing worry about the situation.
Greg Treverton, formerly chairman of the U.S. National Intelligence Council, in a 2017 report contained a cautious acknowledgment of America’s weaknesses. It noted “rising inequality” and “highly polarised politics”.
Treverton, now in academia, takes a dramatically pessimistic view about the future. Recently, in an article co-written with Karen Treverton, headlined the article Civil War is Coming, he argues that the divisions between red and blue America are now so extreme that some sort of split is inevitable.
The division 'might' be peaceful involving “a much looser federation”, he says. But it also could be very violent. Treverton noted ominously: “Republicans are more than twice as likely to own guns as their Democratic counterparts.”
If this were just an isolated view, it might not carry much weight. But other prominent American analysts are coming to similarly pessimistic conclusions. In a soon to be released publication, How Civil Wars Start, by Barbara Walter, University of California, a leading academic authority on the subject, she argues that America fits the criteria of a country on the brink of violent internal conflict.
Walter’s view is that the civil war coming will be characterized by a “fairly consistent stream of terrorist attacks”, rather than clashes between standing armies. Even other scholars not particularly focused on political violence are increasingly gloomy.
In any event, a return to traditional democratic norms in America will be extremely difficult, if not impossible. A return to the good ole days is just not going to occur.
(Alamy)
Blue and red define much more than political opinions. Today, it defines where people live, economics, the rights of the unborn and the women, whether to wear masks, and so much more.
Former President Donald Trump's clarion call that the 2020 election was stolen remains embedded deeply in the hearts of many. Senator Ted Cruz continues to muse about Texas seceding from the union.
Michael Anton, a former member on Trump’s National Security Council, has compared America today with the state of the country before the 1861 American Civil War began.
Americans are today more divided than on the eve of 1861.
You have to take seriously the fact that America has already begun to tear itself apart again. A war is already being fought by lawsuits and through technology. And Americans are more armed than the citizens of any other country. The January 6, 2021 assault on the Capital, terrorism, and senseless shootings all demonstrate the froth bubbling towards a boil.
One of the few things that all Americans agree upon is that China is a serious and dangerous global rival and threat to the United States. And that the commercial and technological advantages America once had over China can no longer be taken for granted, and has greatly eroded.
What’s more is that the current combination of a crisis in American democracy and the rising confidence of authoritarian powers is reminiscent of the 1930s. The Great Depression convinced many in the world, including Americans, that a liberal democracy was fatally flawed. The result was authoritative regimes in the Soviet Union, Mussolini’s Italy, Nazi Germany’s Hitler, and elsewhere.
Only following approximately 85 million lives lost during WWII, it turned out that Americans rose and came together with a profound resilience. We can only hope that once again the U.S. – and Americans - will rise again as the global guardian of political liberty finds history repeating itself.
Taking apart America will be messy. But putting it back together again will be an even bigger challenge, lasting decades, and even generations. Let’s hope the next civil war will be more civil. As an optimist, I look for the best in people. But as a realist, I have my doubts that civility will prevail.
How do you protect your assets in the midst of words, lawsuits and bullets flying in all directions? And how can you, your family and assets be prepared to flee to safety?
Now is the time to get serious about implementing your Standby International Trust to protect your assets.
What is a Standby International Trust©
In a nut shell, you implement a domestic trust that costs less than a foreign trust, is easy to maintain, and with little or no U.S. foreign tax or foreign compliance requirements. And the trust makes available all the added asset protection and estate planning features found in an offshore trust, without the offshore asset protection features being activated until needed. The added feature is a standby provision, so that when a threat appears the trust can be quickly altered into an offshore trust for superior asset protection.
At that time, all of the benefits of an offshore trust are designed to come into play. However, no added offshore costs and compliance requirements arise until, or unless, the standby provision is exercised.
When the standby provision is exercised, the trust can become a full-fledged International Trust, as we have created for many individuals seeking superior asset protection during the past thirty plus years.
In essence, the trust stands by ready to become an International Trust at your election. Hence the name: the Standby International Trust ©.
How Does the Standby International Trust © Work?
The original trust documents contain a standby provision to alter or change the trust. Until such time, you have the benefits of simplicity and lower costs. Then when you, the assets, or the planning structure are under threat, you can utilize the benefits of an International Trust.
Until the standby provision is exercised, the offshore trust asset protective provisions remain dormant. Only when the standby provisions are called upon by the trust Protector – generally you, or your selected successor trust Protector – do they become active. And only then does an offshore trustee replace a domestic trustee. In some cases a personal domestic trustee (a friend, relative or colleague) can continue to act as a domestic trustee, but they too can be terminated, if necessary.
The Standby International Trust springs into action not only through the trust provisions, but through the added documentation that makes it occur.
There are different options for an offshore trustee replacing a domestic trustee. For example, an offshore trustee can be designated when the trust is first implemented and they remain on standby until called upon. Or, an offshore trustee can remain unnamed, and decided upon when needed. Alternatively, a trustee can be selected now, but altered in the future.
The pros and cons to each standby foreign trustee option can be weighed to fit your circumstances.
Typically, the assets would be in the US when the trust is first implemented. And initially they could continue in the US when the standby option is exercised. At that time you can decide whether to keep the assets at home, or move them offshore. But when exercising the standby option, you would minimally consider the options for relocating assets to safer shores at a later date, if required. Naturally, you could also elect to relocate the assets at that time.
A decision could also be made whether to create one or more new offshore LLCs. Assets could be transferred from an existing trust domestic LLC to a new trust offshore LLC. If a new offshore LLC is created, you can also determine whether it is appropriate that you act as the offshore LLC manager controlling and managing the assets, or whether a different option is more desirable.
So long as the assets remain within the trust structure, the date the trust was first created continues as the trust formation date even when exercising the standby feature. This is consistent with statutory trust law features found only in select offshore jurisdictions. What’s important about this feature is that it mitigates or avoids claims of fraudulent transfers. In other words, the assets were in the trust and remained in the trust, and only certain trust options were exercised.
As another standby option, you can elect - for U.S. tax purposes - to maintain the trust as a U.S. domestic grantor trust, or to include the added benefits of a true foreign trust (for tax purposes), if desired.
With the overwhelming number of trusts we’ve created over many years, the mere fact of assets being held inside an International Trust – whether on standby or initially - is often enough to discourage even the most determined plaintiff and their lawyers to bring about a low cost outcome to a claim.
And if extraordinary litigation circumstances arise, there always remains a number of other different asset protective measures that can be exercised. The circumstances, the asset types and values, and your objectives, will ultimately determine which, if any, of the more aggressive offshore asset protective measures become necessary.
The Standby International Trust © provides numerous standby options to flee to safety.
The bottom line is that when a threat arises against you, your assets, or the trust, a more aggressive trust structure remains on standby. Until such time, you can minimize the costs, and keep life simple.
The cost to establish the Standby International Trust © can save you several thousand dollars to establish and to maintain every year.
One caveat – timing is everything. Taking the necessary steps now is essential, so that when a threat arises, your Standby International Trust © is ready to protect you, your hard earned assets, and your family in the years ahead.
In the past, there were two types of trusts integrating estate planning and asset protection: either a domestic trust, or an offshore trust. In the past, most trusts fit into one category or the other. But today there is a hybrid option, the Standby International Trust ©.
In a nutshell, the offshore variety, is significantly more asset protective reliable, offers greater international investment diversification, but comes at a higher cost to set up and maintain. The domestic variety is generally more user friendly, with minimal U.S. tax compliance, and with lower costs to set up and maintain, but comes with a higher risk of asset protection uncertainty.
Today, you can have the benefits of both types of trusts, without the added risks and costs. And this is where the Standby International Trust comes into play.
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If you’d like to learn more and discuss your planning objectives in a confidential initial review, contact me here.
The book How to Legally Protect Your Assets, 2nd edition, explains how you can use an International Trust to accomplish your objectives. Offshore Living & Investing, 2nd edition, takes it to another level.
More International Trust tips can be found at DavidTanzer.com. Both books are available at reduced prices right here at our web site in quality soft cover, pdf, or Kindle.
And visit our site for nearly 100 other complimentary Past Articles.
Until next time…
David
David A Tanzer, Esq.
JD, BSc, Ph.D (Hon)