Estate tax increase: Forgotten fiscal cliff issue

[GlobalWealth]

No need to be shady in offshore trusts, that's just to beat taxes and take unnecessary criminal risk, the strategy is tax free already.

Typical American ignorance.

There is nothing shady about offshore trusts. Actually as trust grantor you still must report income from trust assets regardless of where the trust is domiciled. There is no way to safely shield taxes in an offshore trust with financial or business assets.

Be careful, your lack of knowledge in the field and your preconceived notions can derail your credibility.

There are a multitude of other reasons to use offshore trusts. Asset protection is a key reason for use of offshore trusts. By having ownership of your assets in another jurisdiction, you remove your assets from the US court system making them virtually untouchable by frivolous litigation.

And while you may say that concept is no longer valid due to the Anderson case, in reality it is very valid since the case in question was a result of a poorly structured trust.

You may also say that a US irrevocable trust like a DE APT or NV PIT will do the same thing, that is not really the case either since there are many issues with placing 100% of your assets in a US based trust, not to mention the problems with your trustee also being subject to US law if trust assets are brought into question.

These things are not an issue when you have an asset protection trust in a jurisdiction like Cook Island.

Hang in there kiddo, you may learn something.

 

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[GlobalWealth]

No need to be shady in offshore trusts, that's just to beat taxes and take unnecessary criminal risk, the strategy is tax free already.

As a side note, more than 50% of my client base is not even in the US. Regardless, the Americans that are are increasingly going with an offshore asset protection trust.

 

[Sveke]

Typical American ignorance.

There is nothing shady about offshore trusts. Actually as trust grantor you still must report income from trust assets regardless of where the trust is domiciled. There is no way to safely shield taxes in an offshore trust with financial or business assets.

Be careful, your lack of knowledge in the field and your preconceived notions can derail your credibility.

There are a multitude of other reasons to use offshore trusts. Asset protection is a key reason for use of offshore trusts. By having ownership of your assets in another jurisdiction, you remove your assets from the US court system making them virtually untouchable by frivolous litigation.

And while you may say that concept is no longer valid due to the Anderson case, in reality it is very valid since the case in question was a result of a poorly structured trust.

You may also say that a US irrevocable trust like a DE APT or NV PIT will do the same thing, that is not really the case either since there are many issues with placing 100% of your assets in a US based trust, not to mention the problems with your trustee also being subject to US law if trust assets are brought into question.

These things are not an issue when you have an asset protection trust in a jurisdiction like Cook Island.

Hang in there kiddo, you may learn something.

Alright why don't you ask UBS and their clients how they feel about perceived safe off shore tax havens now?

All I'm saying is its a different world now regulatory wise and be careful. The slope it's much more slippery now.

Rock on with the cook islands, good luck to you.

Sent from my Galaxy Nexus using Tapatalk 2

 

[Kak]

Part of being a good capitalist is to explore other countries for tax and living advantages. I believe in competition, even between countries. The US is currently being out competed unless you are a welfare clown or a old person on SS.

Social security and medicare are 2 big reasons I plan on renouncing.

 

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[Sveke]

Part of being a good capitalist is to explore other countries for tax and living advantages. I believe in competition, even between countries. The US is currently being out competed unless you are a welfare clown or a old person on SS.

Agreed.

What's your point? The topic is the American estate tax.

We've already covered other countries income tax on high earners and the US is very friendly in regards to that.

Corp tax, not so much. Personal wise, just fine at the moment.

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[GlobalWealth]

Alright why don't you ask UBS and their clients how they feel about perceived safe off shore tax havens now?

LOL, what did that have to do with trusts?....absolutely nothing. They were not reporting income and assets offshore. As long as you report, there are no issues.

But again, the idea with offshore trusts is not to shield US taxation. It is to protect assets, minimize or eliminate estate taxation, and create long term wealth for generations. Not to mention once outside the US your investment opportunities open up dramatically.

I have banks I work with outside the US that pay 4-8% interest on cash deposits. Some money managers I know are getting 10-15% annual returns with little risk. All outside the US, and all within offshore trusts.

All I'm saying is its a different world now regulatory wise and be careful. The slope it's much more slippery now.

Rock on with the cook islands, good luck to you.

This isn't my first rodeo. I didn't just wake up last week and say, "I think I'll sell Cook Islands Trusts".

Thanks for the warning, but there is significantly greater safety in non-US trusts than US domestic trusts. On top of that they are typically less costly to set up and maintain.

Nationalistic pride aside, I couldn't imagine a good reason to recommend a US trust over offshore.

 

[Sveke]

LOL, what did that have to do with trusts?....absolutely nothing. They were not reporting income and assets offshore. As long as you report, there are no issues.

But again, the idea with offshore trusts is not to shield US taxation. It is to protect assets, minimize or eliminate estate taxation, and create long term wealth for generations. Not to mention once outside the US your investment opportunities open up dramatically.

I have banks I work with outside the US that pay 4-8% interest on cash deposits. Some money managers I know are getting 10-15% annual returns with little risk. All outside the US, and all within offshore trusts.




This isn't my first rodeo. I didn't just wake up last week and say, "I think I'll sell Cook Islands Trusts".

Thanks for the warning, but there is significantly greater safety in non-US trusts than US domestic trusts. On top of that they are typically less costly to set up and maintain.

Nationalistic pride aside, I couldn't imagine a good reason to recommend a US trust over offshore.

Uh, this is a thread about estate taxes so trusts go hand in hand with that, no? When you structure sometimes estate, there are trusts involved almost 100% of the time. If not trusts, What were you talking about then?

The only reason to go offshore is to avoid the American legal system. Period. Out of the reach of US laws. We both know that. You can do anything on shore that you can off shore unless one of the laws is preventing our hindering you. In that case, it's prob illegal.

How the F*ck is 4-8% on cash deposits available in this global shit storm and not raise your eyebrows? I'm genuinely asking now. What's it backed by? Gold? Since everyone here is on a gold trip. Best thing since sliced white bread right?

My bullshit meter is going off the fing chart right now. 10-15% on low risk investments in this world? Are you fing kidding me? Sound like I'm watching an episode of American greed play out.

From one guy in the biz to another, explain to me how that's possible and feel free to use any industry jargon you want, I speak it. You preach of vast superior knowledge, enlighten me.

I'm genuinely interested in you schooling me now, since that's what you think you've been doing the whole time. Here's your opportunity. I'm all ears.

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[GlobalWealth]

Uh, this is a thread about estate taxes so trusts go hand in hand with that, no? When you structure sometimes estate, there are trusts involved almost 100% of the time. If not trusts, What were you talking about then?

You comment was about UBS and the criminal investigations. That had nothing to do with trusts.

The only reason to go offshore is to avoid the American legal system. Period. Out of the reach of US laws. We both know that.

Correct...finally...

You can do anything on shore that you can off shore unless one of the laws is preventing our hindering you. In that case, it's prob illegal.

Damn....back to ignorance and preconceived notions. Do some homework next time. This shit is getting old.

So actually, there is a lot you can do offshore that you cannot do in the US. For example, can you find me a bank in the US that pays 8% interest for CD? No? Well, I can find them offshore in banks that are much safer than in the US.

Can you find managed portfolios in the US that pay 80% of the upside but guarantee principle? No? Well, I can find them offshore.

The list goes on and on. Open up your mind. The opportunities are endless.

You are stuck in the US media propaganda machine. My guess is that you are either a diehard Republican or Democrat and believe one is vastly superior to the other. I can only hope your eyes are opened at some point.

How the F*ck is 4-8% on cash deposits available in this global shit storm and not raise your eyebrows? I'm genuinely asking now. What's it backed by? Gold? Since everyone here is on a gold trip. Best thing since sliced white bread right?

LOL. You just proved your singleminded allegiance to the American banking system.

I don't plan to answer your question specifically because this is proprietary info for my clients. But I can tell you that I have banks in one country that pay 4% for savings accounts and there has never, ever been a banking failure and the average liquidity ratio is around 20% vs. the 3-5% that is typical in the US.

I can get 8% on longer term CD's at the same banks. Yes, banks plural because several of them offer this.

I have another bank that pays 3.2% on savings accounts in US dollars in another jurisdiction that has never had a banking failure.

I have other banks I work with that pay up to 12% on time deposits in other currencies, so there is some risk there based on currency fluctuations, however you can hedge that risk with options at a cost of less than 2% per year giving you net 10% annually.

My bullshit meter is going off the fing chart right now. 10-15% on low risk investments in this world? Are you fing kidding me? Sound like I'm watching an episode of American greed play out.

sure thing. Keep watching from the safety of your home then. I do find it funny to hear people who respond in disbelief just because they have never experienced it themselves. This is called arrogance.

Now to be fair, I'm a pretty arrogant guy, but I never dismiss anything right away as I fully understand there are many, many people who are smarter and richer than I am.

If I would have told you 10-15% per month, I can see the reason for apprehension, but 10-15% per year? Really? I am up about 20% this year on my own portfolio. it isn't that tough.

Greed? You say that as if its a bad thing....

 

[Sveke]

You comment was about UBS and the criminal investigations. That had nothing to do with trusts.




Correct...finally...




Damn....back to ignorance and preconceived notions. Do some homework next time. This shit is getting old.

So actually, there is a lot you can do offshore that you cannot do in the US. For example, can you find me a bank in the US that pays 8% interest for CD? No? Well, I can find them offshore in banks that are much safer than in the US.

Can you find managed portfolios in the US that pay 80% of the upside but guarantee principle? No? Well, I can find them offshore.

The list goes on and on. Open up your mind. The opportunities are endless.

You are stuck in the US media propaganda machine. My guess is that you are either a diehard Republican or Democrat and believe one is vastly superior to the other. I can only hope your eyes are opened at some point.






LOL. You just proved your singleminded allegiance to the American banking system.

I don't plan to answer your question specifically because this is proprietary info for my clients. But I can tell you that I have banks in one country that pay 4% for savings accounts and there has never, ever been a banking failure and the average liquidity ratio is around 20% vs. the 3-5% that is typical in the US.

I can get 8% on longer term CD's at the same banks. Yes, banks plural because several of them offer this.

I have another bank that pays 3.2% on savings accounts in US dollars in another jurisdiction that has never had a banking failure.

I have other banks I work with that pay up to 12% on time deposits in other currencies, so there is some risk there based on currency fluctuations, however you can hedge that risk with options at a cost of less than 2% per year giving you net 10% annually.




sure thing. Keep watching from the safety of your home then. I do find it funny to hear people who respond in disbelief just because they have never experienced it themselves. This is called arrogance.

Now to be fair, I'm a pretty arrogant guy, but I never dismiss anything right away as I fully understand there are many, many people who are smarter and richer than I am.

If I would have told you 10-15% per month, I can see the reason for apprehension, but 10-15% per year? Really? I am up about 20% this year on my own portfolio. it isn't that tough.

Greed? You say that as if its a bad thing....

Greed is good. No doubt about that.

My response to skirting US law is--Transparency is an honest mans friend. The laws mean nothing if you don't break them. I know bending the rules is fine, I do it for a living, a good one at that. I just don't see the need to take on the risk of off shore accounts in today's frenzied irrational regulatory environment if your not worried about someone finding something out. Don't you think it raises an unnecessary assumption of wrong doing amongst the people you don't want checking you out. Crazy US regulators.

And yes, your absolutely right. I practice in the US for US clients. I have little knowledge of specifics regarding foreign banking institutions.

My surprise was based on your quoted returns on simple savings accounts and your 10-15% numbers. They aren't surprising except for the fact that you said very little risk in the words following. Those types of returns on managed money in this global shit storm are usually related to some type of risk. Don't you think everyone on earth would be flooding to these accounts? Are they that secretive that no one in the mainstream knows they exist? If wealthy Americans use them, then don't you think people look into their finances and try to figure out what they're doing, media, private investigators hired by competition, etc.?

I'm sure you're top notch in your field however It's by no means a stretch to question what you say based on general economic knowledge. These banks you speak of, what part of the world are they in? What type of government runs that said country? What are they using to back those deposits and returns? What type of people and corporate structure are running these banks? I'm sure I could venture to say Africa and find what you speak of in the wealthy hot spots there. I'm also pretty sure I would need to learn a whole different set of rules, some of which may raise my eyebrows. See what I'm saying?

Just common questions someone in the profession would ask when presented with those figures.

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[Kak]

Side note. Why are people that call other people greedy the greedy ones? After all they want the person they are attacking to give them money. I honestly hate the word, it pisses me off.

Carry on...

 

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[Kak]

Another comment. If you can get 10% in savings another country, but their currency out inflates the currency in the country you are spend in it waters down return.

How do you deal with this?

 

[GlobalWealth]

I just don't see the need to take on the risk of off shore accounts in today's frenzied irrational regulatory environment if your not worried about someone finding something out.

I see significantly greater risk in maintaining your nest egg in the US in usd denominated assets. Nearly every person I know with assets over $3m has accounts overseas. Now take that with a grain of salt considering my field of endeavor, but I get phone calls and emails every single day from potential clients looking for ways to move a portion, or all, of their assets offshore.

My response to skirting US law is--Transparency is an honest mans friend.

Again, the UBS debacle was about non-reporting of income and assets. Unrelated to offshore trusts. To be honest, if you wanted to move assets offshore and skirt the law, there are better ways than using trusts.

Those types of returns on managed money in this global shit storm are usually related to some type of risk.

If you know what you are doing, there are tools to use that minimize your downside exposure. Properly structured options and futures contracts can hedge your portfolio with a minimum of expensive.

Don't you think everyone on earth would be flooding to these accounts?

Lots of people are flooding into these accounts. Just not Americans. The regulatory environment in the US won't allow advertising to Americans. I have one brokerage firm I work with as introducing agent that will accept American clients, but only if I introduce them. If you were to call the brokerage up directly, they would tell you they don't accept Americans.

The regulatory environment in the US has sterilized the investment world. Americans are left with standard products and low returns because of the huge cost of doing business.

Are they that secretive that no one in the mainstream knows they exist?

Not really secretive. Just not advertised. As mentioned above, most are not allowed to advertise to Americans. To be honest, but investment firms and banks around the world don't want American clients anymore. Not worth the additional cost and risk of dealing with US regulators.

For example, no Swiss bank today will touch an American client. Only one Lichtenstein bank will accept Americans, but only through their SEC regulated bank that was created only for working with Americans. And they don't offer no where near the returns their 'sister' bank offers for its non-US clients.

Only one bank in Singapore will accept Americans now unless you are a legal resident in Singapore. They have some very unique banking options not offered anywhere else. For example, some of the SG banks offer managed precious metals accounts allowing you to shift your savings from precious metals into cash and back. Plus you can hold up to about 30 different world currencies in your account simultaneously and do everything online. Very unique.

My surprise was based on your quoted returns on simple savings accounts and your 10-15% numbers.

No, I said managed accounts offering little risk. I know of savings accounts paying 3-5%, and CD's paying 8% in usd. In foreign currencies I know of a few paying up to around 12%.

These banks you speak of, what part of the world are they in?

Depends on the product. Europe, Asia, and Latin America mostly.

What are they using to back those deposits and returns?

This is one of the more amusing questions. I will respond with a rhetorical question - what does the US back deposits and returns with? bwahahahahaha

I'm sure I could venture to say Africa and find what you speak of in the wealthy hot spots there.

No African banks. No interest for me to do business there. None of the African countries I am familiar with have any respect for property rights. No way in hell I would put my money in a bank in a country that will steal it at a moments notice. The same can be said for several South American countries as well as a few European countries.

 

[Vigilante]

If you have a tremendous liquid net worth in the United States, but the FDIC will only ensure to $250k in a single account, unless you want to manage dozens of bank accounts what is the most sensible way to secure large sums of cash other than keeping them in greenbacks and securing them outside of the banks?

I am going to need you in the next few years Bobby! The first drink at B&P (for Global Wealth only) is on me as I butter you up for our future business engagements.

 

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[GlobalWealth]

If you have a tremendous liquid net worth in the United States, but the FDIC will only ensure to $250k in a single account, unless you want to manage dozens of bank accounts what is the most sensible way to secure large sums of cash other than keeping them in greenbacks and securing them outside of the banks?

I am a big fan of asset class and geo-political diversification. Based on net worth the answers change. But if you really just want cash, you can spread it amongst a few banks around the world and get a blended return of 3-5% fairly easily.

We are actually working on offering this product in the future. It will be a trust banking relationship.

But I would probably recommend some % in hard assets like gold/silver/platinum in an offshore allocated storage facility, a portfolio of low risk dividend paying stocks, and some real estate.

I would only look at stocks with global exposure and cash flow real estate. Real estate is tough, so it depends on you level of involvement. I have one friend building a Radisson hotel in Panama right now that is selling the 100 units as condos. You can live there, or just rent it like a hotel room and you get 70% of the profit from the hotel (actually 1% of the hotel since you would own 1/100 rooms). Based on current occupancy, returns will be around 18%+.

There are many opportunities like this all over the world. It just takes time, energy and money to find them. But they are there.

 

[liquidglass]

The estate tax is not typically a worry for those that have a great estate planner. I admit the drop to $1million is drastic, but in 2009 it was $2million so not that much of a difference.

2010 was the best year to die (when the estate tax went away completely) so if it wasn't in your plans, then use your wealth to build a time machine haha.

Gifting the estate tax limit each year to family, setting up legacy trusts, moving to off-shore accounts, ILITs, splitting asset owernship between husband/wife, and donating to charity are all great ways to avoid estate taxes. Just remember the sooner, the better. Because all gifts can be taxed post death that were made 5 years previous to the death.

Estate taxes for the unprepared are a bitch, literally. I saw a family that inherited a large amount with no estate planning place and ended up owing more than they inherited because it got triple taxed.