15 Global Strategies to Protect Your Wealth
Content
NAGEL & ASSOCIATES, LLC
ATTORNEYS AT LAW
409 BROAD STREET ~ SUITE 204
SEWICKLEY, PENNSYLVANIA 15143
TELEPHONE (412)749-0500 ♦ FACSIMILE (412)749-0505 ♦ E-mail: [email protected]
15 Global Strategies to Protect Your Wealth
by Joel M. Nagel, Esquire
Here are just some of the bullet point techniques available to people of nearly any
financial background with assets to protect.
Under $250,000 in assets to protect.
1. Consider opening up a bank account based outside the United States. This will
give you the ability to open CDs in other currencies (see number 2 below). This
will also provide you with “insurance” should something happen to the dollar, or
the US banking system. In the event future currency control laws are
introduced, you will already have a nest egg outside the United States, from
which to operate
2. Foreign currencies. Consider holding at least 10% - 20% of your net worth in
non dollar denominated currencies. The Swiss Franc is still considered the
safest currency but, natural reserve currencies such as the Canadian, New
Zealand and Australian dollars pay better interest rates and are also popular
with investors.
3. Precious metals. To protect against all paper currency devaluation, consider
holding at least ten percent of your net worth in gold, silver or other precious
metals. Physical metal located in a facility outside the US is best for security
and asset protection.
4. Metal certificates (such as Pert Mint) often referred to as “foldable gold” give you
the ability to quickly and easily move the certificate from one location to another
and redeem them for either the physical metal or the currency of choice at home
or abroad.
5. Foreign real estate. Own it as a vehicle for capital appreciation. Foreign real
estate also acts as “insurance” to many investors. A physical “safe haven”
where they can go for vacation, retirement or any other reason that they may
wish to spend time outside of the US. Ownership of foreign property often helps
in obtaining foreign residence or citizenship.
Over $250,000 under $2.5 million in assets to protect.
Utilize all of the techniques above, plus consider:
6. Get a good attorney or CPA versed in international matters. While items 1 – 5
are designed to help people with modest means to protect themselves with minor
costs, moving beyond those items requires good counsel, especially to stay
current with compliance and regulatory matters with which most domestic
oriented professionals are not familiar.
7. Asset Protection Trust (APT). This is quite simply the Cadillac of all asset
protection strategies. It legally moves assets from your personal name to a
separate legal person (i.e., the trust) which cannot be sued in US courts. The
asset protection trust is also the foundational element to create a “foreign
person” to make investments that are “closed” to US investors such as hedge
funds, foreign stocks and various other non SEC registered investment products.
8. International Business Company or corporate structures can really be used at
any financial level and their primary purpose is to facilitate global (non US)
commercial activity. Corporate entities are also used to own foreign real estate
and make other types of foreign investments and open foreign bank / brokerage
accounts.
9. Foreign brokerage account. These are generally used by investors who create
foreign structures and want to invest in foreign (non US) stocks / bonds and
other investments that they cannot access from their domestic brokerage
accounts.
10. Foreign residency. This is often used by clients who have the ability to generate
income abroad or simply those of retirement age looking for a personal “safe
haven”. In some circumstances, the foreign residence in conjunction with a
foreign company receiving foreign (non US) income can create the ability for an
individual living abroad to file taxes as a non resident (1040 NR) and receive
nearly $100,000, in annual income and housing allowance expense, tax free.
Over $2.5 million in assets to protect.
This category starts to move away from personal asset protection toward inter-
generational asset protection, estate planning and tax minimization. Utilize all of the
techniques above and also consider:
11. Dynasty trust. While an asset protection trust is capable of both protecting
assets and passing them onto children and grandchildren, a dynasty trust is for
those with sufficient wealth to allow the trust principal to be held in reserve for
many generations and the current income to be distributed to various
beneficiaries.
12. Family foundation. Similar to its common law trust cousin, the foundation is a
hybrid vehicle that acts partly like a trust and partially like a corporation. It can
be used for asset protection, estate planning as well as commercial purposes. A
board runs the foundation much like a company Board of Directors and generally
the goals of the foundation stretch beyond the lifetime of both the initial grantor
and his / her immediate family.
13. Variable Universal Life Insurance (VUL) sometimes referred to as an “insurance
wrapper” is a flexible life insurance product available offshore that is fully
compliant with US tax rules related to insurance. Investments inside a properly
created VUL insurance policy can grow tax deferred and the death benefit
payout is completely income tax free. Its use and ownership is ideal for a foreign
trust or foundation designed to preserve and grow assets over a long period of
time.
Over $10 million in assets to protect.
Utilize all of the techniques above plus consider these last two options as well:
14. A foreign family office either as a “standalone” office or as part of a “shared”
family office, handles tax matters, selects investment advisors, handles foreign
real estate matters, insurance issues, etc all with a view toward maximizing
efficiencies, reducing taxes, and preserving wealth. A “shared” family office
begins at around 2% of assets under management or a minimum of $100,000
per year and good personal family office starts at 2% of assets under
management or $250,000 per year. If you are prepared to handle your wealth as
a full time business, the family office is right for you.
15. Expatriation is the ultimate asset protection, estate planning and tax
minimization vehicle for only the very fewest willing to renounce their citizenship.
United States legislation has made it more difficult but not impossible to
expatriate for tax purposes. Only about 300 – 500 US person expatriate in any
given year for tax related reasons
For more information or to arrange a personal consultation with Mr. Nagel, please
contact us at [email protected] or by telephone at 412-749-0500 to schedule an
appointment.
This paper, while believed to be accurate should not be utilized as legal or financial
advice that may only be obtained from licensed professionals.
ATTORNEYS AT LAW
409 BROAD STREET ~ SUITE 204
SEWICKLEY, PENNSYLVANIA 15143
TELEPHONE (412)749-0500 ♦ FACSIMILE (412)749-0505 ♦ E-mail: [email protected]
15 Global Strategies to Protect Your Wealth
by Joel M. Nagel, Esquire
Here are just some of the bullet point techniques available to people of nearly any
financial background with assets to protect.
Under $250,000 in assets to protect.
1. Consider opening up a bank account based outside the United States. This will
give you the ability to open CDs in other currencies (see number 2 below). This
will also provide you with “insurance” should something happen to the dollar, or
the US banking system. In the event future currency control laws are
introduced, you will already have a nest egg outside the United States, from
which to operate
2. Foreign currencies. Consider holding at least 10% - 20% of your net worth in
non dollar denominated currencies. The Swiss Franc is still considered the
safest currency but, natural reserve currencies such as the Canadian, New
Zealand and Australian dollars pay better interest rates and are also popular
with investors.
3. Precious metals. To protect against all paper currency devaluation, consider
holding at least ten percent of your net worth in gold, silver or other precious
metals. Physical metal located in a facility outside the US is best for security
and asset protection.
4. Metal certificates (such as Pert Mint) often referred to as “foldable gold” give you
the ability to quickly and easily move the certificate from one location to another
and redeem them for either the physical metal or the currency of choice at home
or abroad.
5. Foreign real estate. Own it as a vehicle for capital appreciation. Foreign real
estate also acts as “insurance” to many investors. A physical “safe haven”
where they can go for vacation, retirement or any other reason that they may
wish to spend time outside of the US. Ownership of foreign property often helps
in obtaining foreign residence or citizenship.
Over $250,000 under $2.5 million in assets to protect.
Utilize all of the techniques above, plus consider:
6. Get a good attorney or CPA versed in international matters. While items 1 – 5
are designed to help people with modest means to protect themselves with minor
costs, moving beyond those items requires good counsel, especially to stay
current with compliance and regulatory matters with which most domestic
oriented professionals are not familiar.
7. Asset Protection Trust (APT). This is quite simply the Cadillac of all asset
protection strategies. It legally moves assets from your personal name to a
separate legal person (i.e., the trust) which cannot be sued in US courts. The
asset protection trust is also the foundational element to create a “foreign
person” to make investments that are “closed” to US investors such as hedge
funds, foreign stocks and various other non SEC registered investment products.
8. International Business Company or corporate structures can really be used at
any financial level and their primary purpose is to facilitate global (non US)
commercial activity. Corporate entities are also used to own foreign real estate
and make other types of foreign investments and open foreign bank / brokerage
accounts.
9. Foreign brokerage account. These are generally used by investors who create
foreign structures and want to invest in foreign (non US) stocks / bonds and
other investments that they cannot access from their domestic brokerage
accounts.
10. Foreign residency. This is often used by clients who have the ability to generate
income abroad or simply those of retirement age looking for a personal “safe
haven”. In some circumstances, the foreign residence in conjunction with a
foreign company receiving foreign (non US) income can create the ability for an
individual living abroad to file taxes as a non resident (1040 NR) and receive
nearly $100,000, in annual income and housing allowance expense, tax free.
Over $2.5 million in assets to protect.
This category starts to move away from personal asset protection toward inter-
generational asset protection, estate planning and tax minimization. Utilize all of the
techniques above and also consider:
11. Dynasty trust. While an asset protection trust is capable of both protecting
assets and passing them onto children and grandchildren, a dynasty trust is for
those with sufficient wealth to allow the trust principal to be held in reserve for
many generations and the current income to be distributed to various
beneficiaries.
12. Family foundation. Similar to its common law trust cousin, the foundation is a
hybrid vehicle that acts partly like a trust and partially like a corporation. It can
be used for asset protection, estate planning as well as commercial purposes. A
board runs the foundation much like a company Board of Directors and generally
the goals of the foundation stretch beyond the lifetime of both the initial grantor
and his / her immediate family.
13. Variable Universal Life Insurance (VUL) sometimes referred to as an “insurance
wrapper” is a flexible life insurance product available offshore that is fully
compliant with US tax rules related to insurance. Investments inside a properly
created VUL insurance policy can grow tax deferred and the death benefit
payout is completely income tax free. Its use and ownership is ideal for a foreign
trust or foundation designed to preserve and grow assets over a long period of
time.
Over $10 million in assets to protect.
Utilize all of the techniques above plus consider these last two options as well:
14. A foreign family office either as a “standalone” office or as part of a “shared”
family office, handles tax matters, selects investment advisors, handles foreign
real estate matters, insurance issues, etc all with a view toward maximizing
efficiencies, reducing taxes, and preserving wealth. A “shared” family office
begins at around 2% of assets under management or a minimum of $100,000
per year and good personal family office starts at 2% of assets under
management or $250,000 per year. If you are prepared to handle your wealth as
a full time business, the family office is right for you.
15. Expatriation is the ultimate asset protection, estate planning and tax
minimization vehicle for only the very fewest willing to renounce their citizenship.
United States legislation has made it more difficult but not impossible to
expatriate for tax purposes. Only about 300 – 500 US person expatriate in any
given year for tax related reasons
For more information or to arrange a personal consultation with Mr. Nagel, please
contact us at [email protected] or by telephone at 412-749-0500 to schedule an
appointment.
This paper, while believed to be accurate should not be utilized as legal or financial
advice that may only be obtained from licensed professionals.
