|Wealth Building Information|
Wealth Management, Wealth Protection, and Tax Planning
U.S. Supreme Justice Louis D. Brandeis
"I live in Alexandria Virginia. Near the Supreme Court Chambers is a toll bridge across the Potomac. When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge. This bridge was placed outside the downtown Washington, DC area to serve a useful social service, getting drivers to drive the extra mile and to help alleviate congestion during the rush hour.
If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion. If, however, I drive the extra mile and drive outside the city of Washington to the free bridge, I am using a legitimate, logical, and suitable method of tax avoidance, and I am performing a useful social service by doing so.
For my tax evasion, I should be punished. For my tax avoidance, I should be commended. The tragedy of life today is that so few people know that the free bridge even exists."
Our progressive tax system in the United States facilitates the redistribution of wealth from the more fortunate to the less fortunate. Now, the U.S. judicial system is also being used to redistribute wealth through litigation. Entrepreneurs, business owners, retirees and others who have accumulated any significant amount of wealth are often financially devastated by the U.S. judicial system.
With that in mind, it is easy to see why even a person of average wealth with assets at risk would benefit from implementing a wealth management plan to protect assets from the claims - especially the frivolous claims - of unknown future judgment creditors. Among many other exceptions to liability insurance coverage, most insurance policies do not cover punitive damages or employment-related claims.
Insurance against the most common source of judgments and settlements over $1 million, automobile accidents, is only very rarely maintained at the level necessary to cover such claims. In fact, it may be prohibitively expensive or impossible to insure at such a high level of coverage. While insurance is the first line of defense against legal claims for damages, it is impossible to insure against many sources of significant potential liability.
It is essential to implement an asset protection plan integrated with your estate plan. Your asset protection plan will greatly enhance your estate plan by providing additional assurance that you and your family will be able to reap the fruits of your labor, and often, by providing the means to make gifts of interests in protected assets to family members - gifts which are protected from your unknown future creditors and from all of the creditors of your family members. Simply put, the objective of legitimate offshore asset protection planning is to avoid litigation altogether by using a structure involving the prudent use of professional advice and foreign law; it is not intended to protect dishonest or incompetent persons from creditors. Legitimate tax-neutral, flexible offshore asset protection and investment vehicle are available.
International variable life insurance and international variable annuities with reputable companies in secure offshore jurisdictions can be attractive investment vehicles. In addition to being well protected, because they have different commission structures they are not subject to certain U.S. taxes, offshore life insurance policies and annuities can be significantly less expensive than comparable products offered in the United States.
►What Asset Protection Planning Is Not
Asset protection planning and proper tax planning do not involve tax evasion or anti-IRS theories. All solid well designed asset protection planning is done with full IRS compliance and disclosure.
Asset protection advice is not "cookie-cutter" planning. Avoid cheap asset protection "kits" promoted by dozens of providers via seminars or the Internet. Good asset protection advice is formulated on a case-by-case basis. Neither does legitimate asset protection planning does not involve hiding money offshore and using offshore credit card accounts. While it is a bit more difficult to track protected assets offshore than in the U.S., if you rely mainly on offshore secrecy to protect assets, you will likely soon find you and your assets parted.
Offshore business structures and offshore estate planning structures, including offshore trusts and offshore insurance policies can often offer an excellent solution to asset protection problems. Variable life insurance policies and variable annuity contracts which are compliant with U.S. tax laws, offer a wider range of investment opportunities, and are often available at lower costs than comparable U.S. policies for policies with total aggregate premiums of over $100,000.
Be careful in choosing an Offshore Planning and Asset Protection Planning Consultant.
A Web search will reveal hundreds of offshore service providers offering various offshore tax planning and asset protection schemes, as well as company formation services. How do you choose one out of all of these?
First, look for a consultant with extensive tax experience who can provide competent and comprehensive U.S. tax advice. Most reputable offshore service providers specifically disclaim the U.S. tax consequences of their structures and suggest that you seek the advice of U.S. tax counsel. Less reputable offshore service providers will claim that their plans are set up in jurisdictions where there are no income taxes, no capital gains taxes and no death taxes. While true - for that jurisdiction - the U.S. tax consequences are entirely different.
There is no simple way to avoid taxes offshore that cannot be done onshore. There are sophisticated means that work for legitimate businesses, but there are not "offshore only" ways for the average investor, holding marketable securities and acting alone, to avoid income taxes on investment income. The most predatory offshore service providers will simply lie and tell you that for whatever reason, there are no U.S. taxes due on their preferred type of offshore vehicle ("you don't own the company - you're just the manager;" "you don't owe taxes on offshore trust income;" "the Panamanian foundation is a separate legal entity without any owners, so you don't pay taxes on its income," etc.). Bad tax advice can have grave consequences. Willful tax evasion and willful failure to file required information returns are, of course, serious crimes that can and do result in massive fines and imprisonment. Even worse, for some, may be the fact that relying on the tax advice of an incompetent advisor may not even keep you out of serious trouble - at best, it can result in the imposition of hundreds of thousands of dollars or more in fines and interest, and at worst, fines and imprisonment.
The hiring of a lawyer is an important decision that should not be based solely upon brochures, advertising or other promotional materials. Before you decide, ask for written information about qualifications and experience.
A sophisticated and creative tax planner can:
* Transform tax plans from methods of cost-containment to integrated systems of advanced tax risk management and value creation;
* Transform asset protection plans from ineffective collections of legal odds and ends to integrated systems of advanced legal risk management and security enhancement; and
* Transform individual financial plans and company treasuries from piecemeal jumbles to integrated systems of financial management and wealth preservation.
U.S. citizens should always consult a competent tax attorney or CPA before implementing any planning involving domestic or foreign structures. Windward Harbor's principals are experienced tax planning, wealth management, insurance, investment, tax, and asset protection professionals. We specialize in providing the most effective, legal tax planning available for entrepreneurs and high net worth clients. Windward Harbor will offer asset protection and offshore planning services only to clients who are committed to full U.S. tax compliance.
The materials found in this article, including these comments on asset protection planning and offshore planning, are for general informational purposes only. The information provided herein is not warranted to be accurate or current and must not be regarded as legal advice. All legal and tax planning is very fact- and circumstance-specific, asset protection planning and offshore planning, in particular. Internet subscribers and online readers should not act upon this information without seeking professional advice. You should consult a lawyer if you have a legal matter requiring attention.
© Windward Harbor LLC 2004
Wayne Walker & Christopher Riser, Esq.
Q and A: Financial Independence Tips For Women From Coni Cecil
As a woman Netpreneur, I sat down via e-mail with article-announce regular contributor, Internet marketer and women's financial consultant Coni Cecil of www.cecilfreedom.com. She shared her Internet marketing and financial wisdom for women on the Net. The quote on her site from Eleanor Roosevelt is inspiring: "The future belongs to those who believe in the beauty of their dreams."
The Underlying Belief System
Many of us do not consider the underlying belief system about money to be of any importance. You think it does not matter, because what matters is what you do now. Right, at one level, but not complete. All ideas that we have learned about money in the past are colouring our actions today.
Personal Budget Programs
Do you have financial problems? Then a budget is the answer if you are tired of wondering where your income went. A budget is the answer, if you don't have savings. A budget is also the only solution to getting out of credit card debt.
The Secret Barrier To Wealth - Underearning
Is the ghost of "Money Past" haunting you? Do you feel like no matter what you do to "get ahead" it never works? The problem may not be what you are doing, it may be what you are thinking. Many of us have deep spiritual and psychological patterns around money that can block our efforts at managing our money better and creating prosperity.
Turbocharged Financial Planning
Financial planning is an ongoing process individuals and businesses should implement by organizing all aspects of their finances. This will assist in identifying financial goals, providing a comprehensive written Financial Plan, and implementing the plan in accordance with the objectives that are most important to you.
Anthony Robbins 12 Reasons Why People Dont Get Wealthy
According to Wallace Wattles, in his popular wealth treatise called the Science of Getting Rich, said that, "There is a science of getting rich, and it is an exact science, like algebra or arithmetic. There are certain laws which govern the process of acquiring riches, and once these laws are learned and obeyed by anyone, that person will get rich with mathematical certainty."
My Ambitious Niche - A Completely NEW Way To Find Ambitious Wealth
Turn to the year 1999, a couple of friends sitting on a deck drinking beer and having a few laughs. The intelligent looking one (ME) sips a bud as he looks over to where his wife is, over through the window in the kitchen.
Let Me Inspire You - You Aint Seen Nothing Yet! (PART-1)
You know about compounding right? You understand what pyramiding your result on a weekly basis can do for your seed capital over a short time. You understand that taking just $100 and compounding it at just 8% per week, you can expect to achieve $4371.00 in just 12 months. Taken further, if that was $1000 instead of $100 your end result would be $43,710 and of course if that $1000 was $10,000 you would make nearly half a million in 12 quick months.
You?re Eating Your Retirement Money
Ever think about how eating all those fast food meals for lunch are effecting your pocketbook. Let's do the math. You eat out 5 days a week at an average cost of $5 to $7 a day.
Generate Savings with Smart Use of Electricity!
No matter what income level you are currently at, generating savings is always a smart move to make. So what is one area you can generate a satisfying level of savings? Change your habits and how you use electricity. Yes, do these simple steps and satisfyingly watch your electrical bills dwindle.
A New Economic Policy
Anyone knows that material wealth is measured in goods: apples, cars, shoes, sheep, etc. When the number and the quality of these things increases, wealth increases.
Wealth And Your Net Worth
Most people know it's important to keep and organize all of your vital financial information. But knowing you should and knowing how are two different things!
Don?t Work for Your Money, Make it Work for You!
Well, the New Year is around the corner and so are New Year's Resolutions! It's such a great time of year to consider what the past year has brought us and what we want to create in the coming year.
Cost Averaging - It Makes Sense (Dollars & Cents)
It's no secret that the market goes UP...the market, goes DOWN. That's the basics of Investing 101.
Trustee Fees: How Much is Enough and How Much is Too Much?
I am often amused by the ads and offers I see concerning living trusts.
Getting An Offshore Bank Account Via The Internet
There is no need to use the many middleman websites you will find via a search engine. Most of these are *bogus*, even the slick-looking ones. More and more banks are offering offshore bank accounts direct. Just get a list of banks in the country you're interested in, and go to their web sites.
Thought Creates Reality Even When It Comes To Money
What if I told you that reading a book would also change the way you react to the demands that rest upon your shoulders by the system of money you live under. Would you click HERE to learn more about that new way of perceiving your own money situation that would change everything for you especially where money is concerned?
Could a Roth IRA be Better Than a 401(k)?
Very few people whom I know are familiar with the benefits of the Roth IRA. It was named for the late Senator William Roth of Rhode Island, who proposed it. It is similar to a traditional IRA except contributions are never tax-deductible. Contributions to traditional IRAs are sometimes deductible or partially deductible, depending on your income and whether or not you have a retirement plan like a 401(k) at work. With Roth IRAs, individuals are limited to incomes of $95,000 ($150,000 for couples) to be eligible for full contribution amounts.
Thieves Continue to Pull Off the Biggest Heist in History?Until Now!
Imagine being able to steal untold millions of dollars in plain view without getting caught. Impossible you say. Be careful because you are most likely a victim of this heist. In fact, you may actually be giving these thieves referrals so that they can dupe your friends and family.
How to Save Money and Take the Vacation You Always Wanted
Many people don't realize how much money they spend on convenience and boy does it add up. I am going to share some of my frugal and practical tips of how to save money for the vacation you always wanted. Before we get started make sure you setup a vacation savings account, if you don't have a savings account setup look into an ING Direct savings account. (Find out how to get $25.00 just for opening an account in our forums)
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